UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

For the quarterly period ended ~~September~~June 30, ~~2017~~2022

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

For the transition period from _____________ to _______________

Commission file number:

0-22923

INTERNATIONAL ISOTOPES INC.

(Exact name of registrant as specified in its charter)

Texas

~~Texas~~

74-2763837

(State or other jurisdiction of

incorporation or organization)

(IRS Employer Identification ~~Number)~~No.)

4137 Commerce Circle

Idaho Falls, Idaho, 83401

(Address of principal executive offices, including zip code)

(208)524-5300

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ýYes¨No

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). ýYes¨No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” ~~"accelerated~~“accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated ~~filer~~ ¨ Filerý	Smaller reporting company ý x
~~(Do not check if a smaller reporting company)~~
	Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨Yes ýNo

As of ~~November~~August 3, ~~2017,~~2022, the number of shares of common stock, ~~$.01~~$0.01 par value, outstanding was ~~406,790,703.~~514,779,532.

INTERNATIONAL ISOTOPES INC.

~~FORM~~Form 10-Q

For The Quarter Ended ~~September~~June 30, ~~2017~~2022

TABLE OF CONTENTS

			Page No.
			~~Page No.~~
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets at ~~September~~June 30, ~~2017~~2022 and December 31, ~~2016~~2021	3
	Unaudited Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021	5
	Unaudited Statement of Reconciliation of Stockholder’s (Deficit) Equity for the Three and Six Months Ended June 30, 2022 and 2021	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7 8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 4.	Controls and Procedures	32 26

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	32 26
Item 1A.	Risk Factors	32 26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32 26
Item 6.	Exhibits	33 27
Signatures		34 28

INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(unaudited)

	June 30,			December 31,
	2022			2021
Assets
Current assets
Cash and cash equivalents	$	3,025,513		$	474,851
Accounts receivable		1,301,822			853,675
Inventories		943,645			924,775
Prepaids and other current assets		619,649			1,004,423
Total current assets		5,890,629			3,257,724

Long-term assets
Restricted cash		831,382			830,752
Property, plant and equipment, net		2,039,703			4,299,937
Capitalized lease disposal costs, net		237,436			246,748
Financing lease right-of-use asset		15,626			18,631
Operating lease right-of-use asset		2,371,382			2,429,622
Goodwill		1,384,255			1,384,255
Patents and other intangibles, net		3,781,651			3,859,473
Total long-term assets		10,661,435			13,069,418
Total assets	$	16,552,064		$	16,327,142

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	560,535		$	1,424,028
Accrued liabilities		899,748			1,189,165
Unearned revenue		1,050,084			907,953
Current portion of operating lease right-of-use liability		127,217			121,069
Current portion of financing lease liability		8,411			8,542
Current portion of related party notes payable, net of debt discount		871,868			993,735
Current installments of notes payable		48,973			290,017
Current portion of mandatorily redeemable preferred stock, net of debt discount		4,063,000			—
Total current liabilities		7,629,836			4,934,509

Long-term liabilities
Accrued long-term liabilities		140,625			—
Related party notes payable, net of current portion and debt discount		620,000			620,000
Notes payable, net of current portion		39,556			57,769
Asset retirement obligation		916,887			892,086
Financing lease liability, net of current portion		4,305			8,346
Operating lease right-of-use liability, net of current portion		2,299,136			2,363,815
Mandatorily redeemable convertible preferred stock, net of current portion and discount		—			4,719,822
Total long-term liabilities		4,020,509			8,661,838
Total liabilities		11,650,345			13,596,347

Stockholders' equity
Common stock, $0.01 par value; 750,000,000 shares authorized; 514,726,908 and 502,584,176 shares issued and outstanding respectively		5,147,269			5,025,842
Additional paid in capital		125,535,534			124,469,034
Accumulated deficit		(125,781,084	)		(126,764,081	)
Total equity		4,901,719			2,730,795
Total liabilities and stockholders' equity	$	16,552,064		$	16,327,142

See accompanying notes to consolidated financial statements.

~~Part I. Financial Information~~

~~Item 1. Financial Statements~~

INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated ~~Balance Sheets~~Statements of Operations

September 30,

December 31,
Assets

2017

2016
Current assets

Cash and cash equivalents

$
304,597

$
314,520
Accounts receivable

1,083,137

774,275
Inventories

1,788,784

1,476,240
Prepaids and other current assets

609,414

736,447
Total current assets

3,785,932

3,301,482

Long-term assets

Restricted bank and money market accounts

952,536

450,631
Property, plant and equipment, net

1,904,103

1,948,076
Investment

-

1,492,781
Patents and other intangibles, net

5,923,738

4,186,295
Total long-term assets

8,780,377

8,077,783
Total assets

$
12,566,309

$
11,379,265

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable

$
2,000,966

$
941,659
Accrued liabilities

714,014

568,714
Convertible debt, net of debt discount

-

3,025,165
Current portion of unearned revenue

2,952,658

2,608,328
Current installments of notes payable

67,313

366,953
Total current liabilities

5,734,951

7,510,819

Long-term liabilities

Obligation for lease disposal costs

476,044

468,974
Unearned revenues, net of current portion

364,440

364,440
Notes payable, net of current portion and debt discount

443,476

428,891
Mandatorily redeemable convertible preferred stock

4,496,334

850,000
Total long-term liabilities

5,780,294

2,112,305
Total liabilities

11,515,245

9,623,124

Stockholders' equity

Common stock, $0.01 par value; 750,000,000 shares authorized; 406,755,371 and 404,999,758 shares issued and outstanding respectively

4,067,554

4,049,998
Additional paid in capital

120,355,848

119,595,535
Accumulated deficit

(124,910,190)

(121,939,561)
(Deficit) Equity attributable to International Isotopes Inc. stockholders

(486,788)

1,705,972
Equity attributable to noncontrolling interest

1,537,852

50,169
Total equity

1,051,064

1,756,141
Total liabilities and stockholders' equity

$
12,566,309

$
11,379,265


	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021

Sale of product	$	2,434,808		$	2,759,896		$	5,242,249		$	4,752,408
Cost of product		1,034,278			1,171,968			2,164,976			2,003,322
Gross profit		1,400,530			1,587,928			3,077,273			2,749,086

Operating costs and expenses:
Salaries and contract labor		801,972			625,428			1,735,221			1,293,948
General, administrative and consulting		863,025			875,799			1,776,148			1,781,728
Research and development		87,642			71,979			294,056			109,216
Total operating expenses		1,752,639			1,573,206			3,805,425			3,184,892

Net operating loss		(352,109	)		14,722			(728,152	)		(435,806	)

Other income (expense):
Other income		225,768			32,356			2,028,568			175,476
Interest income		680			46			725			81
Interest expense		(146,387	)		(211,456	)		(318,144	)		(409,747	)
Total other income (expense)		80,061			(179,054	)		1,711,149			(234,190	)
Net income (loss)		(272,048	)		(164,332	)		982,997			(669,996	)
Income attributable to noncontrolling interest		—			17,055			—			112,543

Net income (loss) attributable to International Isotopes Inc.	$	(272,048	)	$	(181,387	)	$	982,997		$	(782,539	)

Net income per common share - basic:	$	—		$	—		$	—		$	—

Net income per common share - diluted:	$	—		$	—		$	—		$	—

Weighted average common shares outstanding - basic		510,499,497			460,798,173			506,985,962			457,123,946

Weighted average common shares outstanding - diluted		510,499,497			460,798,173			512,569,114			457,123,946

See accompanying notes to consolidated financial statements.

INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows


	Six months ended June 30
	2022			2021
Cash flows from operating activities
Net income (loss)	$	982,997		$	(669,996	)
Adjustments to reconcile net income (loss) to net cash used by operating activities
Depreciation and amortization		203,551			287,250
Accretion of obligation for lease disposal costs		24,801			19,136
Accretion of beneficial conversion feature and discount		146,311			199,757
Equity based compensation		237,474			49,093
Gain on sale of property, plant and equipment		(1,797,978	)		—
Right-of-use asset amortization		(291	)		14,532
Changes in operating assets and liabilities:
Accounts receivable		(448,147	)		(272,422	)
Inventories		(18,870	)		169,006
Prepaids and other current assets		384,774			1,098,651
Accounts payable and accrued liabilities		(807,805	)		(964,392	)
Unearned revenues		142,131			(169,388	)
Net cash used in operating activities		(951,052	)		(238,773	)

Cash flows from investing activities:
Proceeds from sale of property, plant and equipment		4,000,000			—
Purchase of property, plant and equipment		(55,200	)		(191,666	)
Net cash provided by (used in) investing activities		3,944,800			(191,666	)

Cash flows from financing activities:
Proceeds from sale of stock and exercise of options and warrants		70,973			8,995
Payments on financing lease		(4,172	)		(3,803	)
Proceeds from the issuance of notes payable		—			351,250
Principal payments on notes payable		(509,257	)		(329,464	)
Net cash used in financing activities		(442,456	)		26,978

Net increase (decrease) in cash, cash equivalents, and restricted cash		2,551,292			(403,461	)
Cash, cash equivalents, and restricted cash at beginning of period		1,305,603			1,751,692
Cash, cash equivalents, and restricted cash at end of period	$	3,856,895		$	1,348,231

Supplemental disclosure of cash flow activities:
Cash paid for interest	$	46,894		$	61,320

Supplemental disclosure of noncash financing and investing transactions
Decrease in accrued interest and increase in equity for conversion of dividends to stock	$	204,480		$	207,480
Increase in operating lease right-of-use asset and right-of-use liability for new lease	$	—		$	1,603
Increase in equity and decrease in liability for the conversion of preferred stock	$	675,000		$	200,000
Non-cash increase of capitalized ARO for increased funding plan	$	—		$	260,715

Reconciliation of cash, cash equivalents, and restricted cash as shown in the condensed consolidated statements of cash flows is presented in the table below:

	June 30,		June 30,
	2022		2021
Cash and cash equivalents	$	3,025,513	$	517,506
Restricted cash included in long-term assets		831,382		830,725
Total cash, cash equivalents, and restricted cash shown in statement of cash flows	$	3,856,895	$	1,348,231

See accompanying notes to the unaudited condensed consolidated financial statements.

INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

~~Unaudited Condensed Consolidated Statements~~Reconciliation of ~~Operations~~Stockholders' (Deficit) Equity

Three months ended September 30,

Nine months ended September 30,

2017

2016

2017

2016

Sale of product
$
1,900,701

$
1,411,263

$
5,520,733

$
4,801,672
Cost of product

1,054,186

908,291

3,169,208

2,776,863
Gross profit

846,515

502,972

2,351,525

2,024,809

Operating costs and expenses:

Salaries and contract labor

559,296

423,915

1,540,082

1,327,112
General, administrative and consulting

763,606

409,937

2,241,749

1,391,551
Research and development

65,911

118,693

267,563

401,710
Total operating expenses

1,388,813

952,545

4,049,394

3,120,373

Operating loss

(542,298)

(449,573)

(1,697,869)

(1,095,564)

Other income (expense):

Other income (expense)

(940,976)

258

(940,851)

6,605
Equity in net income of affiliate

8,040

27,005

53,173

71,578
Interest income

928

117

2,011

274
Interest expense

(113,765)

(119,384)

(391,524)

(348,426)
Total other income (expense)

(1,045,773)

(92,004)

(1,277,191)

(269,969)
Net loss

(1,588,071)

(541,577)

(2,975,060)

(1,365,533)
Loss attributable to non-controlling interest

(5,906)

(2,220)

(4,432)

(6,231)

Net loss attributable to International Isotopes Inc.
$
(1,582,165)

$
(539,357)

$
(2,970,628)

$
(1,359,302)

Net loss per common share - basic and diluted
$
-

$
-

$
-

$
-

Weighted average common shares outstanding –
basic and diluted

406,751,293

403,859,723

406,375,721

402,892,423

Three and Six Months Ended June 30, 2022

(Unaudited)


	Common stock							Equity Attributable
				Additional				to
	Shares	Common		Paid-in		Accumulated		Internat'l Isotopes		Total
	Outstanding	Stock		Capital		Deficit		Shareholders		(Deficit) Equity
Balance, January 1, 2022	502,584,176	$	5,025,842	$	124,469,034	$	(126,764,081)	$	2,730,795	$	2,730,795
Shares issued under employee stock purchase plan	119,910		1,199		7,974		-		9,173		9,173
Stock grant	187,231		1,872		(1,872)		-		-		-
Stock in lieu of dividends on convertible preferred C	2,271,980		22,720		181,760		-		204,480		204,480
Shares issued for exercise of employee stock options	611,111		6,111		(6,111)		-		-		-
Warrant exercise	515,000		5,150		56,650		-		61,800		61,800
Conversion of preferred B stock	8,437,500		84,375		590,625				675,000		675,000
Stock based compensation	-		-		237,474		-		237,474		237,474
Net (loss) income	-		-		-		982,997		982,997		982,997
Balance, June 30, 2022	514,726,908	$	5,147,269	$	125,535,534	$	(125,781,084)	$	4,901,719	$	4,901,719

	Common stock							Equity Attributable
				Additional				to
	Shares	Common		Paid-in		Accumulated		Internat'l Isotopes		Total
	Outstanding	Stock		Capital		Deficit		Shareholders		(Deficit) Equity
Balance, April 1, 2022	506,237,443	$	5,062,374	$	124,885,936	$	(125,509,036)	$	4,439,274	$	4,439,274
Shares issued under employee stock purchase plan	51,965		520		3,456		-		3,976		3,976
Conversion of preferred B stock	8,437,500		84,375		590,625				675,000		675,000
Stock based compensation	-		-		55,517		-		55,517		55,517
Net (loss) income	-		-		-		(272,048)		(272,048)		(272,048)
Balance, June 30, 2022	514,726,908	$	5,147,269	$	125,535,534	$	(125,781,084)	$	4,901,719	$	4,901,719

See accompanying notes to the unaudited condensed consolidated financial ~~statements.~~statements

INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

~~Unaudited Condensed Consolidated Statements~~Reconciliation of ~~Cash Flows~~Stockholders' (Deficit) Equity

Nine months ended September 30,

2017

2016
Cash flows from operating activities:

Net loss
$
(2,975,060)

$
(1,365,533)
Adjustments to reconcile net loss to net cash used in operating activities:

Net income in equity method investment

(53,173)

(71,578)
Depreciation and amortization

166,136

170,242
Loss on equity method investment

946,844

-
Gain on disposal of property, plant and equipment

-

(4,500)
Accretion of obligation for lease disposal costs

7,070

6,930
Accretion of beneficial conversion feature and debt discount

139,858

146,643
Equity based compensation

122,514

74,572
Changes in operating assets and liabilities:

Accounts receivable

91,647

287,206
Prepaids and other current assets

126,998

(249,594)
Inventories

(312,544)

(250,639)
Unearned revenues

344,330

1,079,646
Accounts payable and accrued liabilities

865,167

(93,042)
Net cash used in operating activities

(530,213)

(269,647)

Cash flows from investing activities:

Restricted cash

(501,905)

-
Cash reported through consolidation

80,674

-
Proceeds from sale of property, plant and equipment

-

4,500
Dividends received from equity method investment

109,111

6,369
Purchase of property, plant and equipment

(38,386)

(67,941)
Net cash used in investing activities

(350,506)

(57,072)

Cash flows from financing activities:

Proceeds from sale of stock

13,681

3,282
Cash contributed by non-controlling interest

32,286

-
Proceeds from sale of preferred stock

2,860,000

-
Proceeds from issuance of debt

60,000

360,000
Principal payments on notes payable

(2,095,171)

(48,587)
Net cash provided by financing activities

870,796

314,695

Net decrease in cash and cash equivalents

(9,923)

(12,024)
Cash and cash equivalents at beginning of period

314,520

397,955
Cash and cash equivalents at end of period
$
304,597

$
385,931

Three and Six Months Ended June 30, 2021

~~Continued~~(Unaudited)


	Common stock							Equity Attributable		Equity Attributable
				Additional				to		to
	Shares	Common		Paid-in		Accumulated		Internat'l Isotopes		Noncontrolling		Total
	Outstanding	Stock		Capital		Deficit		Shareholders		Interest		(Deficit) Equity
Balance, January 1, 2021	424,344,298	$	4,243,443	$	122,191,837	$	(125,861,734)	$	573,546	$	2,313,706	$	2,887,252
Shares issued under employee stock purchase plan	211,640		2,117		6,878		-		8,995		-		8,995
Stock grant	118,315		1,183		(1,183)		-		-		-		-
Stock in lieu of dividends on convertible preferred C	1,398,200		13,982		193,498		-		207,480		-		207,480
Shares issued for exercise of employee stock options	1,799,107		17,991		(17,991)		-		-		-		-
Warrant exercise	32,621,409		326,214		(326,214)		-		-		-		-
Conversion of preferred C stock	250,000		2,500		22,500		-		25,000		-		25,000
Conversion of preferred B stock	87,500		875		174,125		-		175,000		-		175,000
Stock based compensation	-		-		49,093		-		49,093		-		49,093
Net (loss) income	-		-		-		(782,539)		(782,539)		112,543		(669,996)
Balance, June 30, 2021	460,830,469	$	4,608,305	$	122,292,543	$	(126,644,273)	$	256,575	$	2,426,249	$	2,682,824

	Common stock							Equity Attributable		Equity Attributable
				Additional				to		to
	Shares	Common		Paid-in		Accumulated		Internat'l Isotopes		Noncontrolling		Total
	Outstanding	Stock		Capital		Deficit		Shareholders		Interest		(Deficit) Equity
Balance, April 1, 2021	460,636,690	$	4,606,367	$	122,103,290	$	(126,462,886)	$	246,771	$	2,409,194	$	2,655,965
Shares issued under employee stock purchase plan	106,279		1,063		3,454		-		4,517		-		4,517
Conversion of preferred B stock	87,500		875		174,125		-		175,000		-		175,000
Stock based compensation	-		-		11,674		-		11,674		-		11,674
Net (loss) income	-		-		-		(181,387)		(181,387)		17,055		(164,332)
Balance, June 30, 2021	460,830,469	$	4,608,305	$	122,292,543	$	(126,644,273)	$	256,575	$	2,426,249	$	2,682,824

See accompanying notes to the unaudited condensed consolidated financial ~~statements.~~statements

Common Stock

Additional Paid-in Capital

Accumulated Deficit

Equity Attributable to Internat’l Isotopes Shareholders

Equity Attributable to Noncontrolling Interest

INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

~~Unaudited Condensed Consolidated Statements of Cash Flows - Continued~~

Nine months ended September 30,

2017

2016
Supplemental disclosure of cash flow activities:

Cash paid for interest
$
283,028

$
118,008

Supplemental disclosure of noncash financing and investing transactions:

Dealer financing for the purchase of a new vehicle
$
-

$
47,513
Decrease in preferred stock and increase in equity for amounts allocated to warrants issued with preferred stock
$
641,674

$
-
Decrease in accrued interest and increase in preferred stock for conversion of debentures
$
13,100

$
-
Decrease in debt and increase in preferred stock for conversion of debentures
$
1,339,900

$
-

Assets reported through consolidation

Cash
$
80,674

Accounts receivable

400,509

Fixed assets

10,883

Goodwill

1,810,337

Accounts payable

(352,540)

Equity
$
1,949,863

~~See accompanying notes to the unaudited condensed consolidated financial statements.~~

~~INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES~~

Notes to Unaudited Condensed Consolidated Financial Statements

~~For the Quarter Ended September~~June 30, ~~2017~~2022

(1)

The Company and Basis of Presentation

International Isotopes Inc. (INIS) was incorporated in Texas in November 1995. The accompanying unaudited condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (GAAP) and include all operations and balances of INIS and its ~~wholly-owned subsidiaries. The unaudited condensed consolidated financial statements also include the accounts of INIS’s 50%~~wholly owned ~~joint venture,~~subsidiaries, including RadQual, LLC (RadQual) and TI Services, LLC (TI Services)~~, and the accounts of INIS’s 24.5% interest in RadQual, LLC (Radqual)~~. TI Services is headquartered in Youngstown, Ohio and was formed with RadQual in December 2010 to distribute products and services for nuclear medicine, nuclear cardiology, and Positron Emission Tomography (PET) imaging. RadQual is a global supplier of molecular imaging quality control and calibration devices, ~~which~~and is ~~now~~ headquartered in Idaho Falls, Idaho. In August 2017, affiliates of INIS purchased 75.5% of RadQual and at the time INIS was named as one of the two managing members of RadQual. In July 2021, INIS purchased the remaining interest in RadQual and now owns 100% of RadQual. INIS, its ~~wholly-owned~~ subsidiaries RadQual and TI Services ~~and RadQual~~ are collectively referred to herein as the “Company,” “we,” “our” or “us.”

On August 10, 2017, affiliates of the Company, including the Company’s Chairman of the Board and the Chief Executive Officer, acquired the remaining 75.5% interest in RadQual. As a result of this change in ownership, the Company determined that it had gained the ability to exercise significant management control over the operations of RadQual. Because of this increased management ability and pursuant to GAAP, the Company has consolidated the accounts of RadQual into its financial statements beginning as of August 10, 2017. See Note 4 “Investment” for additional information.

Affiliates

Nature of Operations ~~–The~~– The Company manufactures a full range of nuclear medicine calibration and reference standards, ~~a wide range of products including~~generic sodium iodide I-131 drug product, cobalt teletherapy sources, and a varied selection of ~~radioisotopes and~~ radiochemicals for medical research, and clinical applications. The Company also provides a host of transportation, recycling, and processing services on a contract basis for clients and holds several patents for a fluorine extraction process that it expects to use in conjunction with a proposed commercial depleted uranium de-conversion facility in Lea County, New Mexico. TheFor 2022, the Company’s business consists of ~~six major~~four business segments: Nuclear Medicine Standards, Cobalt Products, Radiochemical Products, and Fluorine ~~Products,~~Products. Due to minimal activity, the Radiological Services ~~and Transportation.~~business segment has been reorganized into the Company’s Nuclear Medicine Standards segment as of January 1, 2022. The Company’s headquarters and all operations, with the exception of TI Services, are located in Idaho Falls, Idaho.

With the exception of certain unique products, the Company’s normal operating cycle is considered to be one year. Due to the time required to produce some cobalt products, the Company’s operating cycle for those products is considered to be two to three years. Accordingly, preliminary payments received on cobalt contracts, where shipment will not take place for greater than one year, have been recorded as unearned revenue and, ~~classified under current or long-term liabilities,~~ depending upon estimated ship dates, classified under either current or long-term liabilities on the Company’s condensed consolidated balance sheets. These unearned revenues ~~will be~~are being recognized as revenue in the ~~future period~~periods during which the cobalt shipments ~~begin.~~take place. All assets expected to be realized in cash or sold during the normal operating cycle of business are classified as current assets.

Principles of Consolidation

Principles of Consolidation – The accompanying unaudited condensed consolidated financial statements are presented in conformity with GAAP and include ~~the accounts~~all operations and balances of ~~the Company~~INIS and its wholly-owned ~~subsidiaries, as well as its 24.5% interest in~~subsidiaries. See Note 4 “RadQual Acquisition” for additional information regarding RadQual and ~~its 50%-owned joint venture,~~ TI Services. All significant intercompany accounts and transactions have been eliminated in consolidation.

Interim Financial Information

Interim Financial Information – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments and reclassifications considered necessary in order to make the financial statements not misleading and for a fair and comparable presentation have been included and are of a normal recurring nature. Operating results for the ~~nine-month~~three or six-month period ended ~~September~~June 30, ~~2017~~2022 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017.~~2022 or any future periods. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016~~2021 filed with the SEC on March 31, ~~2017.~~2022.

Recent Accounting Pronouncements

Recent Accounting Pronouncements – In ~~May 2017~~ August 2020, the Financial Accounting Standards Board ~~(FASB)~~ issued ~~Accounting Standards Update (ASU) No. 2017-09, "Compensation~~ASU 2020-06 Debt – ~~Stock Compensation (Topic 718): Scope of Modification Accounting"~~Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). ~~ASU 2017-09 amends the requirements in GAAP~~The update simplifies accounting related to ~~accounting in changes to stock compensation awards.~~convertible debt instruments. The ~~guidance in ASU 2017-09~~standard is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company is evaluating the impact this guidance will have on its consolidated financial statements and expects the adoption will not have a significant impact on the results of operations, financial position or cash flows of the Company.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes all existing revenue recognition requirements, including most industry specific guidance. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The FASB has subsequently issued the following amendments to ASU 2014-09 which have the same effective date and transition date of January 1, 2018:

In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delayed the effective date of the new standard from January 1, 2017 to January 1, 2018. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date.

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations, which clarifies the implementation guidance on principal versus agent considerations.

In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies certain aspects of identifying performance obligations and licensing implementation guidance.

In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients related to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes collected from customers.

In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, which amends certain narrow aspects of the guidance issued in ASU 2014-09 including guidance related to the disclosure of remaining performance obligations and prior-period performance obligations, as well as other amendments to the guidance on loan guarantee fees, contract costs, refund liabilities, advertising costs and the clarification of certain examples.

We are evaluating this guidance, particularly as it pertains to the Company’s cobalt products segment where pre-payments are received from customers and the Company maintains future performance obligations. The Company does not, at this time, expect this guidance to have a material impact on its consolidated financial statements since these pre-payments are not currently recognized and are recorded as short-term and long-term liabilities on the Company’s consolidated balance sheets and the revenue will be recognized in the future period during which the performance obligations are met.

In February 2016, the FASB issued ASU 2016-02, Leases, which was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, ~~2018,~~2023 including interim periods within those fiscal years. ~~We are in~~INIS is currently evaluating the ~~process of completing our assessment and anticipate that ASU 2016-02~~effect this standard will have ~~a material impact~~ on our consolidated balance sheets, as we will record significant asset and liability balances in connection with our leased property. The Company has evaluated this standard and believes an adjustment of approximately $800,000 will be made, beginning in 2019, to both the assets and liabilities of the Company to recognize a lease related to real estate.its financial statements.

(2)
Current Developments and Liquidity

Business Condition – Since inception, the Company has incurred substantial losses. During the ~~nine-month period~~six months ended ~~September~~June 30, ~~2017,~~2022, the Company reported a net ~~loss~~income of ~~$2,970,628,~~$982,997, net of non-controlling interest, and net cash used in operating activities of ~~$530,213.~~$951,052. During the ~~same period in 2016,~~six months ended June 30, 2021, the Company reported a net loss of ~~$1,359,302,~~$782,539, net of non-controlling interest, and net cash used in operating activities of ~~$269,647.~~$238,773.
8

During the ~~nine~~three months ended ~~September~~June 30, ~~2017,~~2022, the Company continued its focus on its strongest long-standing core business segments which consist of its radiochemical products, cobalt products, and nuclear medicine standards, ~~radiological services and transportation segments,~~ and in particular, the pursuit of new business opportunities within those segments.

~~The~~Additionally, the Company ~~expects that cash from operations, cash raised via equity financing~~holds a Nuclear Regulatory Commission (NRC) construction and ~~its current cash balance will be sufficient to fund operations~~operating license for the ~~next twelve months. Future liquidity~~depleted uranium facility and ~~capital funding requirements will depend on numerous factors, including, contract manufacturing agreements,~~a property agreement with, Lea County, New Mexico, where the plant is intended to be constructed. The NRC license for the de-conversion facility is a forty (40) year operating license and is the first commercial ~~relationships, technological developments, market factors, available credit,~~license of this type issued in the United States. There are no other companies with a similar license application under review by the NRC. Therefore, the NRC license represents a significant competitive barrier, and ~~voluntary warrant redemption by shareholders. There is no assurance that additional capital and financing will be available on acceptable terms to~~ the Company ~~or at all.~~considers it a valuable asset.

(3)
Net ~~Loss~~Income (Loss) Per Common Share - Basic and Diluted

For the six months ended June 30, 2022, the Company had 12,700,000 stock options outstanding, and 4,063 outstanding shares of Series C Preferred Stock, each of which were not included in the computation of diluted income per common share because they would be anti-dilutive. The Company used the treasury stock method in calculating weighted average common shares diluted.
For the three months ended June 30, 2022, the Company had 26,134,500 stock options outstanding, and 4,063 outstanding shares of Series C Preferred Stock, each of which were not included in the computation of diluted income (loss) per common share because they would be anti-dilutive. The Company used the treasury stock method in calculating weighted average common shares diluted.
For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021, the Company had ~~32,250,000~~18,252,500 stock options outstanding, ~~45,090,000~~7,065,000 warrants outstanding, ~~4,213~~675 outstanding shares of Series B redeemable convertible preferred stock (Series B Preferred Stock), and 4,188 outstanding shares of Series C redeemable convertible preferred stock (Series C Preferred Stock) ~~outstanding, and 425,000 shares~~, each of ~~Series B redeemable convertible preferred stock (Series B Preferred Stock) outstanding that~~which were not included in the computation of diluted ~~loss~~income (loss) per common share because they would be anti-dilutive.

~~For~~The table below shows the ~~three~~calculation of diluted shares:
Net Income (Loss) Per Common Share - Schedule of Weighted Average Number of Shares

3 Months Ended 6 Months Ended
June 30, June 30, June 30, June 30,
2022 2021 2022 2021
Weighted average common shares outstanding - basic 510,499,497 460,798,173 506,985,962 457,123,946

Effects of dilutive shares
Stock Options 0   0   5,583,152 0
Weighted average common shares outstanding - diluted 510,499,497 460,798,173 512,569,114 457,123,946
The table below summarizes common stock equivalents outstanding at June 30, 2022 and ~~nine months ended September 30, 2016,~~2021:
Net Income (Loss) Per Common Share - Basic and Diluted - Schedule of Common Stock Equivalents Outstanding
Series B Redeemable Convertible Preferred Stock
Series C Redeemable Convertible Preferred Stock June 30,
2022 2021
Stock options 26,134,500 18,252,500
Warrants —   7,065,000
Shares of Series B redeemable convertible preferred stock —   337,500
Shares of Series C redeemable convertible preferred stock 40,630,000 41,880,000
66,764,500 67,535,000
(4)       RadQual Acquisition
On July 8, 2021, the Company ~~had 23,450,000 stock options outstanding, 27,419,172 warrants outstanding,~~entered into a Membership Interest Purchase Agreement (the Purchase Agreement) with RadQual and ~~425,000 shares of Series B Preferred Stock outstanding that were not included~~the sellers set forth in the ~~computation of diluted loss per common share because they would be anti-dilutive.~~

~~(4)~~
~~Investment and Business Consolidation~~

~~The Company owns a 24.5% interest in RadQual, with~~Purchase Agreement, which ~~the Company has an exclusive manufacturing agreement for nuclear medicine products. On August 10, 2017, affiliates of the Company, including~~included the Company’s Chairman of the Board, ~~and the~~ Chief Executive Officer, ~~acquired~~former Chairman of the ~~remaining 75.5% interest in RadQual. As a result~~Board, and certain other stockholders of ~~this change in ownership,~~ the Company ~~determined that it gained~~(collectively, the ~~ability~~“Sellers”). Pursuant to ~~exercise significant management control over~~ the ~~operations of RadQual. Because of this increased management ability, and pursuant to GAAP,~~Purchase Agreement, the Company ~~has consolidated~~acquired all of the ~~accounts~~outstanding membership interests of RadQual ~~into its financial statements beginning as of August 10, 2017. Prior to August 10, 2017,~~not then owned by the Company ~~reported its 24.5% ownership~~for an aggregate purchase price of ~~RadQual as an asset with a balance of $1,436,843 and was using the equity method of accounting for this asset. At August 10, 2017, the fair market value~~approximately $4.4 million, payable in shares of the Company’s ~~investment~~common stock valued at $0.11 per share (determined by the average trading price of the Company’s common stock on the OTC Markets during the 60 trading day period immediately prior to June 2, 2021) (the RadQual Acquisition). The Company issued an aggregate of 40,176,236 shares of its common stock to the Sellers as consideration in the RadQual ~~was determined~~Acquisition. Prior to ~~be $489,999 and~~the RadQual Acquisition, the Company ~~reported as other expense a loss of $946,844 for the three months ended September 30, 2017, to adjust the carrying value to fair value under ASC 805. Upon recording the fair value~~owned 24.5% of the ~~assets and liabilities~~outstanding membership interests of RadQual, and after acquiring all of the remaining membership interests of RadQual, RadQual became a ~~provisional amount~~wholly-owned subsidiary of ~~$1,810,887 was recorded as Goodwill. It will take additional time to measure~~ the ~~value~~Company. The RadQual Acquisition closed on July 8, 2021. As TI Services is a 50/50 joint venture between the Company and RadQual, TI Services also became a wholly-owned subsidiary of ~~certain intangibles reported~~the Company as a result of ~~consolidation, but when those amounts are determined, Goodwill may be decreased by~~ the ~~amount attributed to the intangibles.~~RadQual Acquisition.

9
For the nine months ended September 30, 2017, member distributions from RadQual received prior August 10, 2017, totaled $109,111 and were recorded as a reduction of the investment in RadQual. During the same period, earnings allocated to the Company from RadQual prior to August 10, 2017, totaled $53,173, and were recorded as equity in net income of affiliate on the Company’s condensed consolidated statements of operations and as a reduction to the investment on the consolidated balance sheets, prior to consolidation.
(5)       Inventories

At June 30, 2022 and December 31, ~~2016,~~2021, the ~~Company had receivables from RadQual in the amount~~company held inventories of ~~$282,470, which are recorded as part of accounts receivable on the Company’s condensed consolidated balance sheets. For the three-~~$943,645 and nine-month periods ended September 30, 2016, the Company reported revenue from RadQual in the amount of $539,508 and $1,591,679, respectively. Subsequent to August 10, 2017, at which time the Company gained management control and began consolidated accounting for RadQual, all intercompany revenues were eliminated and for the three- and nine-month periods ended September 30, 2017, the Company reported revenue from RadQual in the amount of $359,962. Additionally, as part of the acquisition of RadQual member units, $500,000 in cash was held$924,775 respectfully.

9

~~back and placed in a restricted bank account to cover certain unreimbursed expenses incurred by RadQual prior to the acquisition.~~

~~(5)~~
~~Inventories~~

Inventories consisted of work in process for the following ~~at September 30, 2017 and December 31, 2016:~~business segments:

September 30, 2017

December 31, 2016
Raw materials
$
44,455

$
44,455
Work in process

1,741,513

1,425,056
Finished goods

2,816

6,729

$
1,788,784

$
1,476,240

Inventories - Schedule of Inventory, Current
~~Work in process includes cobalt-60 targets that are located in the U.S. Department~~
June 30, 2022 December 31, 2021
Radiochemical Products $ 47,435 $ 79,747
Cobalt Products 405,152 441,749
Nuclear Medicine Products 491,058 403,279
943,645 924,775
When indicators of ~~Energy’s (DOE) Advanced Test Reactor (ATR) located outside of Idaho Falls, Idaho. These targets are owned by~~inventory impairment exist, the Company ~~and contain cobalt-60 material at various stages of irradiation. The~~measures the carrying value of the ~~targets is based on accumulated irradiation~~inventory against its market value, and ~~handling costs which have been allocated to each target based on~~if the ~~length of time the targets have been held and processed at the ATR. At September 30, 2017, this cobalt target inventory had a~~ carrying value ~~of $432,623,~~exceeds the market value, the inventory value is adjusted down accordingly. No impairment was recorded for the six months ended June 30, 2022 and ~~at December 31, 2016, the cobalt target inventory was valued at $442,759.~~2021.

Work in process also includes costs to irradiate cobalt-60 material under a contract with the DOE. This material has been placed in the ATR and the Company is making progress payments designed to coincide with the completion of the irradiation period. The Company has contracted with several customers for the sale of some of this ~~cobalt-60~~cobalt product material ~~as a bulk product~~ and ~~is collecting~~has collected advance payments for project management, up-front handling, and ~~irradiation charges~~other production costs from those customers. ~~The remainder of cobalt under production with the DOE will be used as the raw material for cobalt sealed source manufacturing.~~ The advance payments from customers ~~have been~~were recorded as unearned ~~revenue. The~~ revenue ~~and the costs associated with irradiation will be~~which are recognized in the Company’s condensed consolidated financial statements as ~~the~~ cobalt ~~targets~~products are completed and ~~start being either shipped to customers or be used as raw material~~shipped. For the six months ended June 30, 2022 and 2021, the Company recognized approximately $26,949 and $157,890, respectively, of revenue in ~~sealed source fabrication, which is expected to begin~~its condensed consolidated statements of operations for customer orders filled during the period under these cobalt contracts. For the three-months ended June 30, 2022 and 2021, the Company recognized approximately $16,311 and $150,090, respectively of revenue in ~~2018.~~its condensed consolidated statements of operations for customer orders filled during the period under these cobalt contracts.

(6)
Stockholders’ Equity, Options, and Warrants

Employee Stock Purchase Plan

The Company has an employee stock purchase plan inpursuant to which employees of the Company may participate to purchase shares of common stock at a discount. During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016,~~2021, the Company issued ~~58,533~~119,910 and ~~56,444~~211,640 shares of common stock, respectively, to employees under the employee stock purchase plan for proceeds of ~~$4,349~~$9,173 and ~~$3,282,~~$8,995, respectively. As of ~~September~~June 30, ~~2017, 760,850~~2022, 2,666,581 shares of common stock remain available for issuance under the employee stock purchase plan.

Stock-Based Compensation Plans

2015 Incentive Plan - In April 2015, the Company’s Board of Directors approved the International Isotopes Inc. 2015 Incentive Plan ~~(2015~~(as amended, the 2015 Plan), which was subsequently approved by the Company’s shareholders in July 2015. The 2015 Plan was amended and restated in July 2018 to increase the number of shares authorized for issuance under the 2015 Plan by an additional 20,000,000 shares. The 2015 Plan provides for the grant of incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and units, and other stock or cash-based awards. The 2015 Plan amended and restated the Company’s Amended and Restated 2006 Equity Incentive Plan (2006 Plan). The 2015 Plan authorizes the issuance of up to 60,000,000 shares of common stock, plus 11,089,967 shares authorized, but not issued under the 2006 Plan. At ~~September~~June 30, ~~2017,~~2022, there were ~~12,922,267~~28,297,971 shares available for issuance under the 2015 Plan.

Employee/Director Grants - The Company accounts for issuances of stock-based compensation to employees by recognizing, as compensation expense, the cost of employee services received in exchange for ~~the~~ equity awards. The compensation expense is based on the grant date fair value of the award. Stock option compensation expense is recognized over the period during which an employee is required to provide service in exchange for the award (the vesting period).

10

Non-Employee Grants - The Company accounts for its issuances of stock-based compensation to non-employees by ~~measuring the value of any awards that were vested and non-forfeitable at their date of issuance~~recognizing compensation expense based on the grant date fair value of the award. ~~The non-vested portion of awards that are subject to~~Stock option compensation expense is recognized over the ~~future performance of~~vesting period for the ~~counterparty are adjusted at each reporting date to their fair values based upon the then current market value of the Company’s stock and other assumptions that management believes are reasonable.~~award.

10
Option awards outstanding as of ~~September~~June 30, ~~2017,~~2022, and changes during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2022, were as follows:

Stockholders’ Equity, Options and Warrants - Schedule of Share-Based Compensation Stock Option Activity

Fixed Options

Shares

Weighted
Average
Exercise Price

Weighted
Average
Remaining
Contractual
Life

Aggregate
Intrinsic Value
Outstanding at December 31, 2016

23,316,667

$
0.05

Granted

11,500,000

$
0.06

Exercised

(2,566,667)

$
0.04

$
108,500
Forfeited

-

Outstanding at September 30, 2017

32,250,000

$
0.06

6.5

$
1,069,500
Exercisable at September 30, 2017

22,750,000

$
0.05

5.2

$
894,500

Fixed Options Shares
Weighted
Average
Exercise Price

Weighted
Average
Remaining
Contractual Life

Aggregate
Intrinsic Value
Outstanding at December 31, 2021 20,777,500 $ 0.06
Granted 8,025,000 0.09
Exercised (1,000,000) 0.04
Expired 0 —
Forfeited (1,668,000) 0.08
Outstanding at June 30, 2022 26,134,500 0.06 6.3 $ 241,645
Exercisable at June 30, 2022 16,992,000 $ 0.06 4.7 $ 230,640
The intrinsic value of outstanding and exercisable shares is based on the closing price of the Company’s common stock on the OTCQB of ~~$0.08~~$0.07 per share on ~~September~~June 30, ~~2017,~~2022, the last trading day of the quarter.

As of ~~September~~June 30, ~~2017,~~2022, there was ~~$253,334~~$283,895 of unrecognized compensation expense related to stock options that will be recognized over a weighted-average period of ~~2.12~~1.91 years.

Total stock-based compensation expense for the ~~three~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 was ~~$105,695~~$237,474 and ~~$13,016,~~$49,093 respectively. Total stock-based compensation expense for the ~~nine~~three-months ended June 30, 2022 and 2021 was $55,517 and $11,674, respectively.
Employee
Members of the Board
During the six months ended ~~September~~June 30, ~~2017~~2022, the Company granted an employee 1,000,000 qualified stock options with an exercise price of $0.10 and ~~2016~~another 25,000 qualified stock options with an exercise price of $0.08 to one of its employees. These options vest over a five-year period with the first vesting at the one-year anniversary of the grant and expiration at ten-year anniversary for all grants. On February 21, 2022, the Compensation Committee granted 3,000,000 qualified stock options to its executive officers and 4,000,000 non-qualified stock options to members of the Board. The exercise price for these options was ~~$122,514~~$0.09. 2,000,000 of the options granted to an executive officer vest one half immediately and ~~$74,572, respectively.~~

~~During~~one half at the ~~nine~~one-year anniversary of the grant. The remaining executive officer and board member options vest one fourth immediately and one fourth each subsequent year. All these granted options expire at the ten-year anniversary of the grant. The options issued during the six months ended ~~September~~June 30, ~~2017, 2,300,000~~2022 have a fair value of $379,581 as estimated on the date of issue using the Black-Scholes options pricing model with the following weighted-average assumptions: risk free interest rate of 1.37% to 3.06%, expected dividend yield rate of 0%, expected volatility of 66.28% to 69.16% and an expected life between 5 and 7.5 years.
Executive Officers
In March 2022, 1,000,000 qualified stock options were exercised under a cashless exercise. The ~~Company~~company withheld ~~1,079,412~~388,889 shares to satisfy the exercise price and issued ~~1,220,558~~611,111 shares of common stock. The options exercised were granted under ~~a qualified plan,~~the 2015 Plan, and, accordingly, there ~~is no~~was not any income tax effect in the accompanying unaudited condensed consolidated financial statements.

Minimum
During the nine months ended September 30, 2017, 266,667 non-qualified stock options were exercised. The Company received $9,333 in cash to satisfy the exercise price and issued 266,667 shares of common stock.

Maximum
Pursuant to an employment agreement with its ~~CEO,~~Chief Executive Officer, the Company ~~issued 350,000~~awarded 307,692 fully vested shares of common stock to its Chief Executive Officer in February ~~2017~~2022 under the 2015 Plan. The number of shares awarded was based on a ~~$28,000~~$28,000 stock award using a price of ~~$0.08~~$0.091 per share. The employment agreement provides that the number of shares issued will be based on the average closing price of common stock for the 20 trading days prior to issue date but not less than ~~$0.10~~$0.05 per share. Compensation expense recorded pursuant to this stock grant was ~~$16,786,~~$27,692, which was determined by multiplying the number of shares awarded by the closing price of the common stock on February 28, ~~2017,~~2021, which was ~~$0.08~~$0.09 per share. The Company withheld ~~140,175~~120,461 shares of common stock to satisfy ~~the employee’s~~ payroll tax obligations in connection with this issuance. The net shares issued on February 28, ~~2017~~2022 totaled ~~209,825 shares.~~187,231.

Warrants
As of June 30, 2022, there are no outstanding warrants. On ~~July 11, 2017 and August 2, 2017, the Compensation Committee~~ ~~granted an aggregate of 8,000,000 incentive stock options to executive officers and employees with~~February 14, 2022, 515,000 Class M Warrants were exercised for an exercise price of ~~$0.06~~$0.12 per share. ~~Also, the Compensation Committee granted 500,000 nonqualified stock options to consultants and 3,000,000 nonqualified stock options to members~~The Company received $61,800 of proceeds as a result of the ~~Board. All of~~exercise. On February 17, 2022 the ~~stock options~~3,625,000 remaining unexercised Class M Warrants expired. On May 12, 2022, the 2,925,000 remaining unexercised Class N Warrants expired.
Warrants outstanding at June 30, 2021, included 4,140,000 Class M Warrants which were ~~granted with~~immediately exercisable at an exercise price of ~~$0.06~~$0.12 per share ~~with the exception of 1,000,000 options issued to a board member with~~and expired on February 17, 2022 and 2,925,000 Class N Warrants which were immediately exercisable at an exercise price of ~~$0.08~~$0.10 per ~~share. The employee~~share and ~~consultant options vest one fifth per year beginning one year from the grant date and expire~~expired on July 11, 2027. Executive officer and board member options vest one fourth immediately and one fourth each subsequent year and expire on July 11, 2027.   The options had a fair value of $450,298 as estimated on the date of issue using the Black-Scholes options pricing model with the following weighted-average assumptions: risk free interest rate of 1.92% to 2.18%, expected dividend yield rate of 0%, expected volatility of 70.31% to 73.67% and an expected life between 5.53 and 7.53 years.May 12, 2022.

11

~~Warrants~~

~~Warrants outstanding at September 30, 2017, and changes during the nine months ended September 30, 2017, were as follows:~~

~~Warrants~~
~~Outstanding at December 31, 2016~~
~~27,419,172~~
~~Issued~~
~~20,090,000~~
~~Exercised~~
-
~~Forfeited~~
~~(2,419,172)~~
~~Outstanding at September 30, 2017~~
~~45,090,000~~
11

Preferred Stock
On ~~July 27, 2017, all outstanding Class K Warrants expired. The Class K Warrants were issued in connection~~May 31, 2022, the Company paid with 8% Convertible Debentures issued in July 2012. In February 2017, pursuant to the Series C Preferred Stock issuances discussed below, 17,165,000 Class M Warrants were issued, and in May 2017, 2,925,000 Class N Warrants were issued.

~~Preferred Stock~~

~~At September 30, 2017, there were 850~~ shares of the Company’s common stock all 675 outstanding Series B Preferred Stock outstanding with a mandatory redemption date of May 2022 at ~~$1,000~~$1,000 per share or ~~$850,000.~~$675,000. The ~~shares are also convertible into common stock at a conversion~~May 31, 2022 average price of $2.00 per share. These preferred shares carry no dividend preferences. Due to the mandatory redemption provision, the Series B Preferred Stock has been classified as a liability in the accompanying balance sheets.

On February 17, 2017, the Company entered into subscription agreements with certain investors, including two of the Company’s directors, for the sale of (i) an aggregate of 3,433 shares of Series C Preferred Stock, and (ii) Class M warrants to purchase an aggregate of 17,165,000 shares of the Company’s common stock ~~(the Class M Warrants), for gross proceeds~~was $0.08 per share. The Company issued 8,437,500 shares of ~~$3,433,000.~~commons stock to satisfy the $675,000 redemption amount.
At June 30, 2022, there were 4,063 shares of the Series C Preferred Stock outstanding with a mandatory redemption date of February 17, 2023 at $1,000 per share in either cash or shares of common stock, at the option of the holder. Holders of the Series C Preferred Stock do not have any voting rights except as required by law and in connection with certain events as set forth in the Statement of Designation of the Series C Preferred Stock. The Series C Preferred Stock accrues dividends at a rate of 6% per annum, payable annually on February 17th of each ~~year, commencing on February 17, 2018.~~year. The Series C Preferred Stock are convertible at the option of the ~~investors~~holders at any time into shares of the Company's common stock at an initial conversion price equal to $0.10 per share, subject to adjustment. ~~At any time after February 17, 2019, if~~If the volume-weighted average closing price of the Company’s common stock over a period of 90 consecutive trading days is greater than $0.25 per share, the Company may redeem all or any portion of the outstanding Series C Preferred Stock at the original purchase price per share plus any accrued and unpaid dividends, payable in shares of common stock. ~~All outstanding shares of Series C Preferred Stock will be redeemed by~~
During the ~~Company on February 17,~~six months ended June 30, 2022 at the original purchase price per share, payable in cash or shares of common stock, at the option of the holder. Holders of Series C Preferred Stock do not have any voting rights, except as required by law and ~~in connection with certain events as set forth in the Statement of Designation~~2021 dividends paid to holders of the Series C Preferred ~~Stock.~~

~~The Class M Warrants are immediately exercisable at an exercise price~~Stock totaled $243,780 and $254,280, respectively. Some holders of ~~$0.12 per share, subject to adjustment as set forth in the warrant, and have a term of five years.~~

~~The Company allocated the proceeds to~~ the Series C Preferred Stock and Class M Warrants based on their relative fair value, which resulted in $2,895,379 being allocated to the Series C Preferred Stock and $537,621 being allocated to the Class M Warrants. The allocated Class M Warrant value was recorded as a discount to the Series C Preferred Stock and will be amortized to interest expense over the five-year life of the warrants.

The fair value of the Class M Warrants, determined using the Black-Scholes Option Pricing Model, was calculated using the following assumptions: risk-free interest rate of 1.92%, expected dividend yield of 0%, expected volatility of 66%, and an expected life of five years.

On March 24, 2017, the Company entered into an Amendment to the 8% Convertible Notes (the Amendment), pursuant to which the 8% Convertible Notes (the Notes) issued by the Company in July 2012 were amended to give noteholders certain additional rights. Pursuant to the Amendment, the Notes were modified to provide each holder the right, at the holder’s option and exercisable prior to May 12, 2017, to convert all or any portion of the principal amount of the Notes, plus accrued but unpaid interest, into shares of Series C Preferred Stock at a conversion price of $1,000 per share. Holders that elected to ~~convert~~settle their ~~Notes into Series C Preferred Stock received a Class N Warrant to purchase up to 3,750~~dividend payments with shares of the Company’s common stock ~~for each share~~in lieu of ~~Series C Preferred Stock received upon conversion of~~cash. For the ~~Notes, with each Warrant having a five-year term, a cashless exercise feature,~~three months ended March 31, 2022 and ~~an exercise price of $0.10 per share~~2021 the Company issued 2,271,980 and 1,398,200 shares of common ~~stock. On May 12, 2017, the Company completed the retirement~~stock, respectively, in lieu of

12

~~$1,835,000~~ a dividend payment of ~~the Notes in early~~$204,480 and $207,480, respectively. The remaining dividend payable was settled with cash ~~redemptions,~~of $39,300 and $780,000 of the Notes were converted into an aggregate of 780 shares of Series C Preferred Stock and Class N Warrants to purchase an aggregate of 2,925,000 shares of the Company’s common stock. See Note 7 “Debt” below for additional information.$46,800 respectively.

~~The Class N Warrants are immediately exercisable at an exercise price of $0.10 per share, subject to adjustment as set forth in the warrant, and have a term of five years.~~(7)        Debt

The Company allocated the proceeds to the Series C Preferred Stock and Class N Warrants based on their relative fair value, which resulted in $675,947 being allocated to the Series C Preferred Stock and $104,053 being allocated to the Class N Warrants. The allocated Class N Warrant value was recorded as a discount to the Series C Preferred Stock and will be amortized to interest expense over the five-year life of the warrants.

The fair value of the Class N Warrants, determined using the Black-Scholes Option Pricing Model, was calculated using the following assumptions: risk-free interest rate of 1.93%, expected dividend yield of 0%, expected volatility of 66%, and an expected life of five years.

~~(7) Debt~~

In July 2012, the Company entered into a securities purchase agreement with certain institutional and private investors pursuant to which it sold 8% Convertible Notes for an aggregate of $3,069,900. The Notes carried a stated interest rate of 8%, were unsecured and matured July 2017. These Notes were convertible at any time into shares of the Company's common stock at an initial conversion price of $0.225 per share, subject to adjustment under certain conditions. Each investor also received a common stock purchase warrant to purchase common stock equal to twenty-five percent (25%) of the shares issuable upon conversion of the Notes. The warrants were immediately exercisable at a price of $0.30 per share and had a term of five years. As discussed above, on May 12, 2017, the Company completed the retirement of $1,835,000 of the Notes in early cash redemptions, and $780,000 of the Notes were converted into an aggregate of 780 shares of Series C Preferred Stock. The remaining Notes matured on July 27, 2017, at which time the Company paid $255,000 in principal and $6,623 in interest to the remaining Note holders.

In December 2013, the Company entered into a promissory note agreement with ~~the~~its then Chairman of the Board and aone of our major ~~shareholder~~shareholders, pursuant to which ~~the Company~~we borrowed ~~$500,000.~~$500,000 (the 2013 Promissory Note). The ~~note~~2013 Promissory Note is ~~unsecured~~secured and bears interest at 6%6% per annum and was originally due ~~September~~June 30, ~~2014.~~2014. According to the terms of the 2013 Promissory Note, at any time, the lenders may settle any or all of the principal and accrued interest with shares of our common stock. In December 2019, the 2013 Promissory Note was modified to extend the maturity date to December 31, 2021, with all remaining terms unchanged. In January 2022, the 2013 Promissory Note was modified to extend the maturity date to December 31, 2023, with all remaining terms unchanged. At June 30, 2022, the principal balance of the 2013 Promissory Note was $500,000 and accrued interest payable on the 2013 Promissory Note was $256,734.
In April 2018, we borrowed $120,000 from our Chief Executive Officer and Chairman of the Board pursuant to a promissory note (the 2018 Promissory Note). The 2018 Promissory Note accrues interest at 6% per annum, which is payable upon maturity of the 2018 Promissory Note. The 2018 Promissory Note was originally unsecured and originally matured on August 1, 2018. At any time, the ~~lenders~~holder of the 2018 Promissory Note may elect to have any or all of the principal ~~plus~~and accrued interest ~~under the promissory note repaid in the form~~settled with shares of our common stock based on the average price of the shares over the previous 20 trading days. In June 2018, the 2018 Promissory Note was modified to extend the maturity date to March 31, 2019 with all other provisions remaining unchanged. In February 2019, the 2018 Promissory Note was modified to extend the maturity date to July 31, 2019 with all other provisions remaining unchanged. In July 2019, the 2018 Promissory Note was modified to extend the maturity date to January 31, 2020 with all other provisions remaining unchanged. In December 2019, the 2018 Promissory Note was modified to extend the maturity date to December 31, 2021, the note was also modified to become secured by company assets, with all other provisions remaining unchanged. In December 2021, the 2018 Promissory Note was modified to extend the maturity date to December 31, 2023, with all remaining terms unchanged. At June 30, 2022, accrued interest on the 2018 Promissory Note totaled $30,170.
In December 2019 and February 2020, the Company borrowed $1,000,000 from four of the Company’s major shareholders pursuant to a promissory note (the 2019 Promissory Note). The 2019 Promissory Note bears an interest rate of 4% annually and is due December 31, 2022. According to the terms of the 2019 Promissory Note, at ~~a price per share determined~~any time, the lenders may settle any or all of the principal and accrued interest with shares of the Company’s common stock based ~~upon~~on the average closing price of the Company’s common stock for the 20 days preceding the ~~maturity or prepayment date.~~payment. In connection with the ~~promissory note, each of~~2019 Promissory Note, the lenders ~~was~~were issued ~~5,000,000~~warrants totaling 30,000,000 warrants to purchase shares of the Company’s common stock at ~~$0.06~~$0.045 per ~~share.~~share (the Class O Warrants). The ~~warrants are immediately exercisable. Pursuant~~fair value of these Class O Warrants issued totaled $446,079 and was recorded as a debt discount and will be amortized over the life of the 2019 Promissory Note. The Company calculated a beneficial conversion feature of $315,643 which will be accreted to ~~an amendment to~~interest expense over the ~~promissory note on~~life of the 2019 Promissory Note. At June 30, 2014, the maturity date was extended to December 31, 2017 and each lender was granted an additional 7,500,000 warrants, which are immediately exercisable, to purchase shares of the Company’s common stock at $0.06 per share. In December 2016, the note was further modified to extend the maturity date to December 31, 2022, ~~with all remaining terms unchanged. At September 30, 2017,~~ the balance of the ~~promissory note~~2019 Promissory Note was ~~$500,000~~$1,000,000, The remaining debt discount was $75,037, the remaining beneficial conversion feature was $53,096, and the accrued interest ~~payable~~ on the ~~note was $114,234. Interest expense recorded for the three- and nine-month periods ended September 30, 2017, was $7,500 and $22,500, respectively.~~2019 Promissory Note totaled $99,131.

12
In ~~September 2016,~~April 2021, the Company borrowed ~~an aggregate of $360,000 from the Company’s former~~$250,000 from its Chief Executive Officer and Chairman of the Board ~~of Directors and the Company’s current Chairman of the Board of Directors.~~pursuant to a promissory note (the 2021 Promissory Note). The ~~note~~2021 Promissory Note accrued interest at ~~a rate of 6%~~6% per ~~year,~~annum, which was payable upon maturity of the ~~note on June 30, 2017.~~2021 Promissory Note. The ~~note~~2021 Promissory Note was secured ~~by company assets not otherwise encumbered. During February 2017,~~and was to mature on December 31, 2022. At any time, the ~~$360,000 note plus~~holders of the 2021 Promissory Note were able to elect to have any or all of the principal and accrued interest ~~in the amount of $8,000, were~~ settled ~~in full~~ with shares of ~~Series C Preferred Stock. A cash payment~~our common stock at a conversion price of ~~$520 was made for residual interest due.~~

~~In August 2017,~~$0.11 per share. On March 31, 2022, the Company ~~borrowed $60,000 from its Chairman of~~repaid the ~~Board of Directors pursuant to a promissory note.~~2021 Promissory Note in full. The ~~note accrues interest at 5% per year, which is payable upon maturity of the note,~~payment included $250,000 in principal and ~~at September 30, 2017, the amount of accrued interest on the note was $250. The note is unsecured and matures on June 30, 2018.~~$14,500 in interest.

13

(8)
Commitments and Contingencies

Dependence on Third Parties

The production of ~~HSA~~High Specific Activity Cobalt is dependent upon the ~~DOE,~~Department of Energy (DOE), and its prime operating contractor, which controls the ~~ATR~~Advanced Test Reactor (ATR) and laboratory operations at the ATR located outside of Idaho Falls, Idaho. In October 2014, the Company signed a ten-year contract with the DOE for the irradiation of cobalt targets for the production of cobalt-60. The Company will be able to purchase cobalt targets for a fixed price per target with an annual 5% escalation in price. The contract term is October 1, 2014, through September 30, 2024, however, the contract may be extended beyond that date. Also, the DOE may end the contract if it determines termination is necessary for the national defense, security or environmental safety of the United States. If this were to occur, all payments made by the Company, for partially irradiated undelivered cobalt material, would be refunded.

Sales of our most predominant radiochemical products are dependent upon a few key suppliers. An interruption in production by any of these individual suppliers could have an immediate negative impact upon radiochemical sales until material could be purchased from alternate suppliers including obtaining regulatory approval to use material from alternative suppliers if necessary.
The Nuclear Medicine Reference and Calibration Standard manufacturing is conducted under an exclusive contract with RadQual, which in turn has an agreement in place with several companies for distributing the products. Additionally, the majority of the radiochemical productproducts sold by the Company isare dependent upon certain radioisotopes that are supplied to the Company through ~~an agreement~~agreements with ~~a single entity.~~several suppliers. A loss of any of these ~~customers or~~ suppliers could adversely affect operating results by causing a delay in production or a possible loss of sales.

Contingencies

Because all the Company’s business segments involve the handling or use of radioactive material, the Company is required to have an operating license from the ~~U.S. Nuclear Regulatory Commission (NRC)~~NRC and specially trained staff to handle these materials. The Company has amended this operating license numerous times to increase the amount of material permitted within the Company’s facility. Although this license does not currently restrict the volume of business operations performed or projected to be performed in the upcoming year, additional processing capabilities and license amendments could be implemented that would permit processing of other reactor-produced radioisotopes by the Company. The financial assurance required by the NRC to support this license has been provided for with a surety bond held with North American Specialty Insurance Company which is supported by a restricted money market account held with Merrill Lynch in the amount of ~~$452,536, held by Merrill Lynch.~~$831,382 at June 30, 2022.

In August 2011, the Company received land from Lea County, New Mexico, pursuant to a Project Participation Agreement (PPA), whereby the land was deeded to the Company for no monetary consideration. In return, wethe Company committed to construct a uranium de-conversion and Fluorine Extraction Process ~~(FEP)~~ facility on the land. In order to retain title to the property, ~~we were~~the Company was to begin construction of the de-conversion facility no later than December 31, 2014, and complete Phase I of the project and have hired at least 75 persons to operate the facility no later than December 31, 2015, although commercial operations need not have begun by that date. In 2015, the Company negotiated a modification to the PPA ~~agreement~~ that extended the start of construction date to December 31, 2015, and the hiring milestone to December 31, 2016. Those dates were also not ~~met and~~met. The Company has been in discussion with commercial companies possibly interested in purchasing rights to this project. Should those discussions come to fruition the Company ~~is currently in the process of renegotiating~~plans to negotiate a second modification to the PPA agreement to further extend ~~those~~the commitment dates. If the Company is not successful in ~~extending~~reaching an amendment to extend the performance dates in the ~~agreement~~PPA then it may, at its sole option, either purchase or re-convey the property to Lea County, New Mexico. The purchase price of the property would be $776,078, plus interest at the annual rate of 5.25% from the date of the closing to the date of payment.  The Company has not recorded the value of this property as an asset and will not do so until such time that sufficient progress on the project has been made to meet ~~our~~the Company’s obligations under the agreements for permanent transfer of the title.

13
(9)      Revenue Recognition
~~On March 8, 2016,~~
Revenue from Product Sales
The following tables present the Company’s revenue disaggregated by business segment and geography, based on management’s assessment of available data:
Revenue Recognition - Summary of Sales from Contracts with Customers Disaggregated by Business Segment and Geography
U.S. Three Months Ended June 30, 2022 Three Months Ended June 30, 2021
Outside U.S. U.S.
Outside
U.S.

Total
Revenues

% of Total
Revenues
U.S.
Outside
U.S.

Total
Revenues

% of Total
Revenues
Radiochemical Products $ 1,266,249 $ 113,790 $ 1,380,039 57% $ 1,091,114 $ 137,095 $ 1,228,209 45%
Cobalt Products 89,946 9,200 99,146 4% 562,744 14,250 576,994 21%
Nuclear Medicine Products 744,154 211,469 955,623 39% 768,349 186,344 954,693 34%
Fluorine Products 0 0 0 0% 0 0 0 0%
$ 2,100,349 $ 334,459 $ 2,434,808 100% $ 2,422,207 $ 337,689 $ 2,759,896 100%
Six Months Ended June 30, 2022 Six Months Ended June 30, 2021
U.S.
Outside
U.S.

Total
Revenues

% of Total
Revenues
U.S.
Outside
U.S.

Total
Revenues

% of Total
Revenues
Radiochemical Products $ 2,776,571 $ 229,391 $ 3,005,962 57% $ 1,637,924 $ 251,462 $ 1,889,386 40%
Cobalt Products 256,502 14,550 271,052 5% 676,023 19,344 695,367 15%
Nuclear Medicine Products 1,584,536 380,699 1,965,235 38% 1,712,205 433,437 2,145,642 45%
Fluorine Products 0 0 0 0% 22,013 0 22,013 0%
$ 4,617,609 $ 624,640 $ 5,242,249 100% $ 4,048,165 $ 704,243 $ 4,752,408 100%
The Company’s revenue consists primarily of calibration and reference standards manufactured for use in the nuclear medicine industry, distribution of radiochemicals including sodium iodide I-131 drug product, and cobalt source manufacturing. With the exception of certain unique products, the Company’s normal operating cycle is considered to be one year. Due to the time required to produce some cobalt products, the Company’s operating cycle for those products is considered to be two to three years. Accordingly, preliminary payments received on cobalt contracts, where shipment will not take place for greater than one year, have been recorded as unearned revenue on the Company’s condensed consolidated balance sheets and classified under current or long-term liabilities, depending upon estimated ship dates. For the six months ended June 30, 2022, the Company ~~delivered~~reported current unearned revenue of $1,050,084. For the period ended December 31, 2021, the Company reported current unearned revenue of $907,953. These unearned revenues will be recognized as revenue in the periods during which the cobalt shipments take place.
Accounts Receivable
The Company records a ~~Demand~~receivable when it has an unconditional right to receive consideration after the performance obligations are satisfied.  As of June 30, 2022, and December 31, 2021, accounts receivable totaled $1,301,822 and $853,675, respectively.  For the six months ended June 30, 2022, the Company has an allowance for ~~Arbitration letter~~doubtful accounts of approximately $19,000.
(10)      Leases
The Company leases office and warehouse space under operating leases. Right-of-use assets represent the Company’s right to ~~Alpha Omega Services (AOS) of Bellflower, California. The demand letter requested arbitration before the American Arbitration Association seeking the recovery of a cash deposit made to AOS~~use an underlying asset for the ~~purchase~~lease term and lease liabilities represent its obligation to make lease payments under the lease. Operating lease, right-of-use assets, and liabilities are recognized at the lease commencement date based on the present value of ~~a shipping container plus additional amounts~~lease payments over the reasonably certain lease term. The implicit rates with the Company’s operating leases are generally not determinable and the Company uses its incremental borrowing rate at the lease commencement date to determine the present value of its lease payments. The determination of the Company’s incremental borrowing rate requires judgement. The company determines its incremental borrowing rate for ~~lost revenue~~each lease using its then-current borrowing rate. Certain of the Company’s leases include options to extend or terminate the lease. The Company establishes the number of renewal options periods used in determining the operating lease term based upon its assessment at the inception of the operating lease. The option to renew the lease may be automatic, at the option of the Company, or mutually agreed to between the landlord and the Company. Once the facility lease term has begun, the present value of the aggregate future minimum lease payments is recorded as a ~~result~~right-of-use asset. Lease expense is recognized on a straight-line basis over the term of ~~not owning~~ the container. The demand was for approximately $918,000 plus attorneys’ fees and costs. AOS subsequently responded to the demand letter with a counter-demand denying the Company’s claims and requesting $2,000,000, plus attorney’s fees. The Company has subsequently requested additional damages in the amount of $863,806 bringing the total claim for refund and damages to $1,673,241. Arbitration proceedings took place during a two-week period in March 2017 and April of 2017. An additional week of proceedings took place in June 2017, and one additional week of proceedings took place during August 2017. The Company expects the proceedings should be concluded in November 2017 and the arbitrator’s decision is expected before the end of 2017. It is not possible to predict the outcome of this matter and there is no assurance that the Company will be successful in recovering damages from its claim or defending the counter claims.

14

~~(9)~~lease.

14

Six Months Ended June 30,
2022 2021
Operating lease costs $ 141,605 $ 126,904
Short-term operating lease costs 2,713 7,670
Financing lease expense:
Amortization of right-of-use assets 4,172 3,005
Interest on lease liabilities 649 1,018
Total financing lease expense 4,821 4,023
Total lease expense $ 149,139 $ 138,597

Right-of-use assets obtained in exchange for new operating lease liabilities $ —   $ 1,603
Right-of-use assets obtained in exchange for new financing lease liabilities $ —   $ —

Weighted-average remaining lease term (years) - operating leases 12.6 13.6
Weighted-average remaining lease term (years) - financing leases 1.8 2.6
Weighted-average discount rate - operating leases 6.75 % 6.75 %
Weighted-average discount rate - financing leases 8.41 % 8.76 %
The future minimum payments under these operating lease agreements are as follows:
Leases - Schedule of Future Minimum Payments of Lease Liabilities
Operating Financing
2022 (excluding the six-months ended June 30, 2022) $ 143,554 $ 4,820
2023 287,108 5,881
2024 287,108 2,929
2025 287,108 0
2026 287,108 0
Thereafter 2,312,301 0
Total minimum operating lease obligations 3,604,287 13,630
Less-amounts representing interest (1,177,934 ) (914 )
Present value of minimum operating lease obligations 2,426,353 12,716
Current maturities (127,217 ) (8,411 )
Lease obligations, net of current maturities $ 2,299,136 $ 4,305
(11)        Segment Information

The Company has ~~six~~4 reportable segments which include: Nuclear Medicine Standards, Cobalt Products, Radiochemical Products, and Fluorine ~~Products,~~Products. The Company had five reportable segments in 2021 which also included Radiological Services. The Radiological Services business segment included field services, gemstone processing, and ~~Transportation.~~ source disposal. As the Company is no longer engaged in field services and gemstone processing, which made up the substantial portion of activities of this segment, separate reporting of this segment has been discontinued. The Company continues to engage in source disposal activities and has begun reporting these activities under the Nuclear Medicine Standards segment beginning January 1, 2022.
15
Information regarding the operations and assets of these reportable business segments is contained in the following table:

Segment Information - Schedule of Segment Reporting Information by Segment

Three months ended June 30, Six months ended June 30,
Sale of Product 2022 2021 2022 2021
Radiochemical Products $ 1,380,039 $ 1,228,209 $ 3,005,962 $ 1,889,386
Cobalt Products 99,146 576,994 271,052 695,367
Nuclear Medicine Standards 955,623 954,693 1,965,235 2,145,642
Fluorine Products 0   0   0   22,013
Total Segments 2,434,808 2,759,896 5,242,249 4,752,408
Corporate revenue 0   0   0   0
Total Consolidated $ 2,434,808 $ 2,759,896 $ 5,242,249 $ 4,752,408
Three months ended June 30, Six months ended June 30,
Depreciation and Amortization 2022 2021 2022 2021
Radiochemical Products $ 7,415 $ 78,430 $ 49,345 $ 157,977
Cobalt Products 12,140 12,399 24,281 26,038
Nuclear Medicine Standards 28,587 18,120 57,233 34,742
Fluorine Products 26,095 31,158 52,190 57,253
Total Segments 74,237 140,107 183,049 276,010
Corporate depreciation and amortization 10,196 6,941 20,502 11,240
Total Consolidated $ 84,433 $ 147,048 $ 203,551 $ 287,250
Three months ended June 30, Six months ended June 30,
Segment Income (Loss) 2022 2021 2022 2021
Radiochemical Products $ 505,630 $ 404,457 $ 2,976,293 $ 408,882
Cobalt Products (42,332 ) 208,581 (55,407 ) 178,484
Nuclear Medicine Standards (26,144 ) 110,085 11,572 373,403
Fluorine Products (42,343 ) (31,627 ) (74,173 ) (65,141 )
Total Segments 394,811 691,496 2,858,285 895,628
Corporate loss (666,859 ) (872,883 ) (1,875,288 ) (1,678,167 )
Net Income $ (272,048 ) $ (181,387 ) $ 982,997 $ (782,539 )
Three months ended June 30, Six months ended June 30,
Expenditures for Segment Assets 2022 2021 2022 2021
Radiochemical Products $ 0   $ 0   $ 0   $ 3,103
Cobalt Products 0   0   0   16,592
Nuclear Medicine Standards —   32,911 51,100 167,911
Fluorine Products 4,100 0   4,100 4,060
Total Segments 4,100 32,911 55,200 191,666
Corporate purchases 0   0   0   0
Total Consolidated $ 4,100 $ 32,911 $ 55,200 $ 191,666
June 30, December 31,
Segment Assets 2022 2021
Radiochemical Products $ 924,131 $ 2,890,590
Cobalt Products 563,906 597,420
Nuclear Medicine Standards 1,358,491 2,259,759
Fluorine Products 5,205,266 5,258,823
Total Segments 8,051,794 11,006,592
Corporate assets 8,500,270 5,320,550
Total Consolidated $ 16,552,064 $ 16,327,142

16

Three months ended September 30,

Nine months ended September 30,
Sale of Product

2017

2016

2017

2016
Radiochemical Products

$
605,507

$
433,394

$
1,777,903

$
1,216,587
Cobalt Products

116,750

67,653

420,816

573,308
Nuclear Medicine Standards

808,148

804,382

2,451,252

2,454,399
Radiological Services

349,565

99,807

844,898

460,874
Fluorine Products

-

-

-

-
Transportation

20,731

6,027

25,864

96,504
Total Segments

1,900,701

1,411,263

5,520,733

4,801,672
Corporate revenue

-

-

-

-
Total Consolidated

$
1,900,701

$
1,411,263

$
5,520,733

$
4,801,672

Three months ended September 30,

Nine months ended September 30,
Depreciation and Amortization

2017

2016

2017

2016
Radiochemical Products

$
1,875

$
1,748

$
5,093

$
5,246
Cobalt Products

8,468

10,056

27,322

33,747
Nuclear Medicine Standards

3,066

1,768

7,554

10,221
Radiological Services

9,494

8,755

28,928

24,471
Fluorine Products

28,491

28,030

85,337

83,990
Transportation

2,682

2,891

8,253

7,540
Total Segments

54,076

53,248

162,487

165,215
Corporate depreciation and amortization

1,197

1,828

3,649

5,027
Total Consolidated

$
55,273

$
55,076

$
166,136

$
170,242

Three months ended September 30,

Nine months ended September 30,
Segment Income (Loss)

2017

2016

2017

2016
Radiochemical Products

$
113,906

$
90,953

$
339,059

$
250,424
Cobalt Products

66,229

(4,516)

221,224

305,138
Nuclear Medicine Standards

124,876

178,265

504,510

540,065
Radiological Services

135,245

26,543

375,069

186,370
Fluorine Products

(37,135)

(102,055)

(178,170)

(297,355)
Transportation

415

(24,156)

(43,127)

(26,898)
Total Segments

403,536

165,034

1,218,565

957,744
Corporate loss

(1,985,701)

(704,391)

(4,189,193)

(2,317,046)
Net Loss

$
(1,582,165)

$
(539,357)

$
(2,970,628)

$
(1,359,302)

Three months ended September 30,

Nine months ended September 30,
Expenditures for Segment Assets

2017

2016

2017

2016
Radiochemical Products

$
3,190

$
-

$
3,190

$
-
Cobalt Products

-

-

-

-
Nuclear Medicine Standards

-

-

-

2,881
Radiological Services

3,436

-

13,277

40,813
Fluorine Products

2,010

2,451

12,213

11,170
Transportation

-

-

-

53,631
Total Segments

8,636

2,451

28,680

108,495
Corporate purchases

9,706

6,957

9,706

6,957
Total Consolidated

$
18,342

$
9,408

$
38,386

$
115,452

September 30,

December 31,

Segment Assets

2017

2016

Radiochemical Products

$
269,388

$
267,920

Cobalt Products

1,676,881

1,414,240

Nuclear Medicine Standards

481,767

502,361

Radiological Services

238,775

171,354

Fluorine Products

5,728,503

5,801,627

Transportation

39,833

49,706

Total Segments

8,435,147

8,207,208

Corporate assets

4,131,162

3,172,057

Total Consolidated

$
12,566,309

$
11,379,265

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including statements regarding industry prospects and future results of operations or financial position, made in this Quarterly Report are forward-looking statements. Words such as “anticipates,” “believes,” “should,” “expects,” ~~“future” and~~“future,” “intends” and similar expressions identify forward-looking statements. In particular, statements regarding the future prospects of our business segments, future cash flow from operations, the Company’s ability to achieve profitability, the ability to continue irradiation of cobalt targets, the business prospects and growth projection for our business segments, the FDA approval for certain of our products, and the status of our proposed uranium de-conversion facility, are forward-looking statements. Forward-looking statements reflect management’s current expectations, plans or projections, and are inherently uncertain. Actual results could differ materially from management's expectations, plans or projections. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report. Certain risks and uncertainties that could cause our actual results to differ significantly from management’s expectations are described in the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016~~2021 filed with the Securities and Exchange Commission (SEC) on March 31, ~~2017, in this report~~2022 and in the other reports we file with the SEC. These factors describe some but not all of the factors that could cause actual results to differ significantly from management’s expectations. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated ~~events.~~events, except as required by applicable law. Readers are urged, however, to review the risks and other factors set forth in the reports that we file from time to time with the SEC.

BUSINESS OVERVIEW

International Isotopes Inc., its wholly owned subsidiaries, including RadQual, LLC and ~~joint venture,~~ TI Services, ~~and RadQual~~LLC (collectively, the Company, we, our, or us) manufacture a full range of nuclear medicine calibration and reference standards, manufacture a ~~wide~~ range of cobalt products, ~~including cobalt teletherapy sources,~~ and distribute sodium iodide I-131 as a ~~varied selection of radioisotopes and radiochemicals for medical research, and clinical applications.~~generic drug. We also hold several patents for a fluorine extraction process that we intend to use in conjunction with a planned commercial depleted uranium de-conversion facility, and provide a host of transportation, recycling, and processing services on a contract basis for clients. We also own ~~a 24.5%~~100% interest ~~in and have management control~~ of RadQual, LLC (RadQual), a global supplier of molecular imaging quality control ~~devices, with which we have an exclusive manufacturing agreement for nuclear imaging products.~~and calibration devices.

RADQUAL ACQUISTION
On ~~August 10, 2017, affiliates~~July 8, 2021, we entered into a Membership Interest Purchase Agreement (the Purchase Agreement) with RadQual and the sellers set forth in the Purchase Agreement, which included our Chairman of the ~~Company, including the Company’s~~Board, Chief Executive Officer, former Chairman of the Board, and certain other stockholders of the ~~Chief Executive Officer,~~Company (collectively, the Sellers). Pursuant to the Purchase Agreement, we acquired all of the outstanding membership interests of RadQual not then-owned by the Company for an aggregate purchase price of approximately $4.4 million, payable in shares of our common stock valued at $0.11 per share (determined by the average trading price of our common stock on the OTC Markets during the 60 trading day period immediately prior to June 2, 2021) (the RadQual Acquisition). We issued an aggregate of 40,176,236 shares of its common stock to the Sellers as consideration in the RadQual Acquisition. Prior to the RadQual Acquisition, we owned approximately 24.5% of the outstanding membership interests of RadQual, and after acquiring all of the remaining 75.5% interest in RadQual. As a result of this change in ownership, the Company determined that it had gained the ability to exercise significant management control over the operations of RadQual. Because of this increased management ability and pursuant to GAAP, the Company has consolidated the accountsmembership interests of RadQual, ~~into its financial statements beginning as~~RadQual became a wholly-owned subsidiary of ~~August 10, 2017. See Note 4 “Investment” to our consolidated financial statements in this report for additional information.~~the Company. The RadQual Acquisition closed on July 8, 2021.

Our business consists of the following ~~six major~~four business ~~segments:~~segments in 2022 and consisted of five business segments in 2021:

Nuclear Medicine Standards. Our Nuclear Medicine Standards segment consists of the manufacture of sources and standards associated with Single Photon Emission Computed Tomography (SPECT) and Positron Emission Tomography (PET) imaging. These sources are used for indication of patient positioning, ~~for~~ SPECT ~~imaging, SPECT~~and PET camera operational testing, and calibration of dose measurement equipment. Revenue from nuclear medicine products includes consolidated sales from TI Services, LLC (TI Services), a ~~50/50~~ joint venture that we formed with RadQual in December 2010 to distribute ~~products and services for nuclear medicine, nuclear cardiology and PET imaging and, as of August 10, 2017, consolidated sales of RadQual.~~our products. Our nuclear medicine standards products include ~~flood sources, dose calibrators, rod sources, flexible and rigid rulers, spot markers, pen point markers, and~~ a host of ~~specialty design items.~~specially designed items used in the nuclear medicine industry. In addition to ~~manufacturing~~ the manufacture of these products, ~~themselves,~~ we have developed a complete line of specialty packaging for the safe ~~transportation~~transport and handling of these products. Beginning January 1, 2022, this segment also includes miscellaneous source disposal activities that were previously reported as part of the Radiological Services segment.

17

Cobalt Products. Our Cobalt Products segment includes the production of bulk cobalt (cobalt-60), fabrication of cobalt capsules for radiation therapy and various industrial applications, and recycling of expended cobalt sources. We are the only company in the U.S. that can provide all these unique services. There has been a significant increase in regulation by the Nuclear Regulatory Commission (NRC) in recent years that has created a significant barrier to new entrants tointo this market. The Company has a contract in place with the U.S. Department of Energy (DOE) for the production of high specific activity cobalt in the Advanced Test Reactor (ATR) in Idaho. This agreement will be in effect until October 2024.

17
Radiochemical Products. Our Radiochemical Products segment includes production and distribution and FDA approved generic sodium iodide I-131 drug product for the treatment of ~~various isotopically pure radiochemicals for medical, industrial, or research applications. These products~~hyperthyroidism and carcinoma of the thyroid. We are ~~either directly produced by us or are purchased in bulk form from other producers and distributed by us in customized packages and chemical forms tailored to meet customer requirements.~~the only U.S. Company distributing this generic drug product. This segment ~~will~~ also ~~include our generic~~includes distribution of certain other radiochemical products and contract manufacturing of radiopharmaceutical ~~and pharmaceutical~~ products ~~we plan to begin producing and selling pending U.S. Food and Drug Administration (FDA) approval.~~

~~We have submitted an abbreviated New Drug Application (aNDA) to the U.S. Food and Drug Administration (FDA)~~ for our Sodium Iodide Iodine-131 oral solution, and the FDA has provided a target date for approval of the Sodium Iodide aNDA of February 17, 2018. The FDA has also granted the Company’s request for an expedited review which could accelerate that approval, however, the FDA has indicated that the expedited review status may not improve upon their February 2018 target date. Once approved we anticipate quickly starting commercial sales of the drug product which should have a significant positive impact on our revenues. We are in the process of drafting commercial sales agreements with certain Group Purchase Organizations (GPO’s) and pharmaceutical distributing companies for commercial sale of this product when FDA approved. We are also considering other generic drug opportunities and plan to expand the range of products offered within this business segment in the coming years.customers.

Fluorine Products. We established the Fluorine Products segment in 2004 to support production and sale of the gases that we expected to ~~be produced~~produce using our Fluorine Extraction Process (FEP) in conjunction with the operation of the proposed depleted uranium de-conversion facility in Lea County, New Mexico. Near the end of 2013, due to changes in the nuclear industry, we placed further engineering work on this project on hold. ~~Further~~We continue to hold discussions with potential future customers seeking this type of service, however, further development activity within this segment will be deferred until market and industry conditions change to justify resuming design and construction of the facility. In the meantime, the Company expects to continue to incur some costs associated with the maintenance of licenses and other necessary project investments, and to continue to keep certain agreements in place that will support resumption of project activities at the appropriate time.

Radiological Services. Our Radiological Services segment ~~consists~~consisted of a wide variety of miscellaneous services such as decommissioning disused irradiation units, performing sealed source exchanges in irradiation and therapy units, and gemstone processing. ~~We are licensed through the NRC to perform certain~~The Company has suspended all of its field service activities and has terminated most gemstone processing. Due to decreased activity in ~~connection with~~this segment, starting January 1, 2022, this segment was reorganized into our Nuclear Medicine Standards segment.
COVID-19 UPDATE
As a result of the ~~U.S. Department~~COVID-19 pandemic, we experienced a reduction of ~~Energy’s (DOE) Orphan Source Recovery Program (OSRP). These activities include services~~sales within our nuclear medicine calibration standards segment and radiochemicals segment during 2021. There was no discernable impact from COVID-19 to ~~support recovery~~our cobalt products business segment during the period. The decrease in sales for 2021 for our nuclear medicine calibration standards segment was the result of ~~disused~~the temporary closure of many imaging clinics and suspension of elective or non-essential imaging procedures. During the three months ended March 31, 2022, we experienced some global shipping disruption that were partially attributable to the COVID-19 pandemic. The decrease in sales in our nuclear medicine calibration standards segment for the six months ended June 30, 2022, is partially due to these shipping disruptions.
To-date we have not furloughed or terminated any employees as a result of the financial impact of COVID-19. The Company has only seen a limited impact in our raw material supply chain related to the COVID-19, primarily some plastics which have been in strong demand for certain types of personal protective equipment. Alternative sources ~~under the DOE’s OSRP and installation or removal~~ of ~~certain cobalt therapy units. We designed and built a mobile hot cell unit~~raw materials have been obtained without any interruption to ~~use~~production. However, if we are unable to obtain alternative sources of raw materials in the ~~performance of OSRP field service jobs. There~~future or if we experience other disruptions from the COVID-19 pandemic, we may experience an adverse impact on our operations, financial results, and cash flow. The Company has ~~been a significant~~seen an increase in ~~the amount~~costs for many production supplies due to recent cost inflation which have led to increases to costs of ~~work contracts obtained for these services during the second~~goods sold and ~~third quarters of 2017 and the Company expects significant growth within the segment over the fourth quarter of 2017 and continuing into 2018.~~operating expenses.

~~Transportation.~~ Our Transportation segment was established in 2006 to provide transportation of our own products and to support our field services activities and to offer “for hire” transportation services of hazardous and non-hazardous cargo materials. This business segment provides us with considerable savings for the transportation of our products and produces a small revenue stream by providing transportation of products for other companies.

18

RESULTS OF OPERATIONS

Three Months Ended ~~September~~June 30, ~~2017~~2022 Compared to Three Months Ended ~~September~~June 30, ~~2016~~2021

Revenue for the three months ended ~~September~~June 30, ~~2017~~2022 was ~~$1,900,701~~$2,434,808 as compared to ~~$1,411,263~~$2,759,896 for the same period in ~~2016,~~2021, an overall ~~increase~~decrease of ~~$489,438,~~$325,088, or approximately ~~35%~~12%. This ~~increase~~decrease in revenue was ~~largely~~ the result of decreased revenue ~~increases~~ in ~~both the radiochemical~~our cobalt segment offset by increased revenue in our Radiochemical and ~~radiological services segments.~~ Nuclear Medicine Standards segments, as discussed in detail below.
The following table presents a period-to-period comparison of total revenue by segment for the three months ended ~~September~~June 30, ~~2017~~2022 and ~~2016:~~2021:

For the three-
months ended
September 30,

For the three-
months ended
September 30,

For the three-
months ended
June 30,

For the three-
months ended
June 30,

Sale of Product

2017

2016

$ change

% change
2022 2021 $ change % change
Radiochemical Products

$
605,507

$
433,394

$
172,113

40%
$ 1,380,039 $ 1,228,209 $ 151,830 12%
Cobalt Products

116,750

67,653

49,097

73%
99,146 576,994 (477,848) -83%
Nuclear Medicine Standards

808,148

804,382

3,766

0%
955,623 954,693 930 0%
Radiological Services

349,565

99,807

249,758

250%
Fluorine Products

-

-

-

0%
- - - 0%
Transportation

20,731

6,027

14,704

244%
Total Segments

1,900,701

1,411,263

489,438

35%
Total Consolidated

$
1,900,701

$
1,411,263

$
489,438

35%
$ 2,434,808 $ 2,759,896 $ (325,088) -12%

18
Cost of sales ~~increased~~decreased to ~~$1,054,186~~$1,034,278 for the three months ended ~~September~~June 30, ~~2017~~2022 from ~~$908,291~~$1,171,968 for the same period in ~~2016.~~2021. This is ~~an increase~~a decrease of ~~$145,895,~~$137,690, or approximately ~~16%~~12%. Gross profit for the three months ended September 30, 2017 was $846,515, compared to $502,972 for the same period in 2016. This represents an increase of $343,543, or approximately 68%. Our gross profit percentage was 45% for the three months ended September 30, 2017, and 36% for the same period in 2016. The ~~increase~~decrease in cost of sales in the three-month comparison was ~~in part~~primarily due to the decreased sales activity in our ~~increased radiochemical products sales and related increase~~Cobalt segment, as discussed in ~~the volume of material purchased to support those sales. Additionally, cost of sales~~detail below. Gross profit for ~~radiological services performed during~~ the three months ended ~~September~~June 30, ~~2017, increased significantly by $108,254,~~2022 was $1,400,530, compared to $1,587,928 for the same period in 2021. This represents a decrease in gross profit of $187,398, or approximately 215%, as compared to the same three-month period in the prior year. This increase is the result of increased field service activities performed under contracts for the OSRP and the International Atomic Energy Agency and related costs incurred to execute these jobs.12%.

The following table presents cost of sales and gross profit data for each of our business segments for the three months ended ~~September~~June 30, ~~2017~~2022 and ~~2016:~~2021:

For the three-
months ended
September 30,

% of
Total Sales

For the three-
months ended
September 30,

% of
Total Sales

For the three-
months ended
June 30,

% of
Total Sales

For the three-
months ended
June 30,

% of
Total Sales

2017

2017

2016

2016
2022 2022 2021 2021
Total Sales

$
1,900,701

$
1,411,263

$ 2,434,808 $ 2,759,896
Cost of Sales

Radiochemical Products

$
436,019

23%

$
318,388

23%
$ 506,522 50% $ 487,126 18%
Cobalt Products

14,399

1%

35,939

3%
26,014 1% 263,948 10%
Nuclear Medicine Standards

444,346

23%

500,609

35%
501,742 21% 420,894 14%
Radiological Services

158,601

8%

50,347

4%
Fluorine Products

-

-

-

-
- 0% - 0%
Transportation

821

0%

3,008

0%
Total Segments

1,054,186

55%

908,291

65%
1,034,278 72% 1,171,968 42%

Gross Profit

$
846,515

$
502,972

$ 1,400,530 $ 1,587,928
Gross Profit %

45
%

36
%

58% 58%

19

Operating expense increased approximately 11% to ~~$1,388,813~~$1,752,639 for the three months ended ~~September~~June 30, ~~2017,~~2022, from ~~$952,545~~$1,573,206 for the same period in ~~2016.~~2021. This increase of ~~$436,268, or approximately 46%,~~$179,433, is primarily ~~the~~due to an approximate 28% increase in Salaries and Contract Labor costs and a 22% increase in Research and Development costs. The increase in Salaries and Contract Labor costs is a result of an increased number of employees and increases ~~in General, Administrative and Consulting costs, specifically increased legal costs~~to labor rates incurred during the three months ended ~~September~~June 30, ~~2017,~~2022, as compared to the same period in ~~2016.~~2021. The 22% increase ~~legal costs pertain~~in Research and Development cost is due to ~~our on-going arbitration proceedings, which we believe should be concluded~~increased activity in ~~late 2017. Salaries and contract labor costs increased to $559,296, for~~product development during the three months ended ~~September~~June 30, ~~2017,~~2022, as compared to ~~$423,915, for~~ the same period in 2016. This is an increase of $135,381, or approximately 32% and is the result of an increase in the number of the Company’s personnel. In addition, non-cash equity compensation expense recorded for the three months ended September 30, 2017, was $105,695 and for the same period in 2016, non-cash equity compensation was $13,016. This is an increase of $92,679 and is the result compensation expense recorded for 11,500,000 stock options which were granted to employees and non-employees in July 2017. Non-cash equity compensation is calculated based on unexercised and outstanding stock options, warrants, and other equity based instruments. As these instruments become fully vested, are exercised or expire the related non-cash compensation expense will decrease. At September 30, 2017, there were 32,250,000 option awards outstanding of which 22,750,000 were vested.2021.

The following table presents a comparison of total operating expense for the three months ended ~~September~~June 30, ~~2017~~2022 and ~~2016:~~2021:

For the three-
months ended
September 30,

For the three-
months ended
September 30,

For the three-
months ended
June 30,

For the three-
months ended
June 30,

Operating Costs and Expenses:

2017

2016

% change

$ change
2022 2021 % change $ change
Salaries and Contract Labor

$
559,296

$
423,915

32%

$
135,381
$ 801,972 $ 625,428 28% $ 176,544
General, Administrative and Consulting

763,606

409,937

86%

353,669
863,025 875,799 -1% (12,774)
Research and Development

65,911

118,693

-44%

(52,782)
87,642 71,979 22% 15,663
Total operating expenses

$
1,388,813

$
952,545

46%

$
436,268
$ 1,752,639 $ 1,573,206 11% $ 179,433

Other income was $225,768 for the three months ended June 30, 2022, as compared to $32,356 for the same period in 2021. This is an increase of $193,412, or approximately 598%, primarily due to $200,000 in income from a sublease of our facility. In February 2022, we entered into an Asset Purchase Agreement with Pharmalogic Idaho, LLC, pursuant to which we sold certain assets for $4.0 million in cash. The Assets consisted primarily of manufacturing equipment and a sublease acquired by the Company in connection with the previously announced termination of the manufacturing and supply agreement with another company. As part of this sublease agreement, we received $200,000 once relocation and build-out costs were completed.
Interest expense for the three months ended ~~September~~June 30, ~~2017~~2022 was ~~$113,765,~~$146,387, compared to ~~$119,384~~$211,456 for the same period in ~~2016.~~2021. This is a decrease of ~~$5,619,~~$65,069, or approximately 5%31%. Interest expense ~~reported for this three-month period~~ includes ~~interest accrued and paid to holders of our convertible debt which was issued in July 2012 and matured in July 2017 as well as~~ dividends accrued on our Series C Redeemable Convertible Preferred Stock. Interest expense related to the convertible debt has been allocated over the life of the Note to general operations and to research and development based on the use of the funding proceeds. The remaining debt matured on July 27, 2017, at which time the Company paid $255,000 in principal and $6,623 in interest to the remaining Note holders.Stock (Series C Preferred Stock). As discussed ~~in detail~~ below, we issued Series C Preferred Stock in February 2017 and May of 2017. For the three months ended ~~September~~June 30, ~~2017,~~2022, we accrued dividends payable of ~~$63,195~~$60,945, which have been recorded as interest expense. Additionally, non-cash interest expense in the amount of ~~$32,084 was recorded~~$26,548 for ~~this same period~~the accretion of the beneficial conversion feature of the 2019 Promissory Note (as defined below) and $37,518 for the issuance of warrants ~~related~~in conjunction with the 2019 Promissory Note were recorded for the three months ended June 30, 2022. See Note 7 “Debt” to our unaudited consolidated financial statements in this Quarterly Report for additional information about our indebtedness and the ~~preferred stock issuances. Interest was also paid on a loan for a vehicle purchased in May 2016.~~associated interest expense.

19
Our net loss for the three months ended ~~September~~June 30, ~~2017~~2022, was ~~$1,582,165,~~$272,048, compared to ~~$539,357,~~net loss of $181,387, for the same period in ~~2016.~~2021. This is an increase in loss of ~~$1,042,808, or approximately 193%, and~~$90,661 is ~~primarily~~largely the result of athe decrease in revenue in our Cobalt product segments offset by the increase in revenue in our Radiochemical products segment. The increase in loss ~~recorded on the write down of our investment in RadQual. As discussed in Note 4~~is also due to the ~~accompanying consolidated unaudited financial statements,~~increase in ~~August 2017,~~operating expense from salaries and contract labor and expenses from research and development for the three months ended June 30, 2022, as a result of a change in the member ownership of RadQual, the net assets and liabilities of RadQual were re-valued based on the purchase price of 75.5% of RadQual’s member units by certain affiliates of the Company. As a result of that fair market valuation, our 24.5% investment in RadQual was valued at $489,999 and we recorded a loss on investment in the amount of $946,884, per ASC 805, Accounting for Business Combinations. Subsequentcompared to the ~~ownership change~~same period in ~~RadQual, we changed from recording our investment~~2021, but offset somewhat by the increase in RadQual using the equity method of accounting to the consolidation method of accounting. In accordance with ASC 810, from the date of the acquisition of the remaining member units of RadQual by certain of the Company’s affiliates, we are accounting for this change prospectively.other income.

Radiochemical Products. Revenue from the sale of ~~radiochemical products~~Radiochemical Products for the three months ended ~~September~~June 30, ~~2017~~2022 was ~~$605,507,~~$1,380,039, compared to ~~$433,394~~$1,228,209 for the same period in ~~2016.~~2021. This is an increase of ~~$172,113,~~$151,830, or approximately ~~40%.~~12% during the three months ended June 30, 2022. The increase is the result of increased sales of our generic sodium iodide I-131 drug product. We expect continued sales growth for our Radiochemical products going forward.
Cost of sales for Radiochemical Products increased to $506,522 for the three months ended June 30, 2022, as compared to $487,126 for the same period in ~~the period-to-period revenue comparison~~2021. This is an increase of $19,396, or approximately 4%, and was primarily the result of ~~a major competitor stopping the supply~~increased sales of ~~sodium iodide product in October 2016 resulting in facilities turning to us for their supply of sodium iodide~~ product.

20

Gross profit of radiochemical products for the three months ended ~~September~~June 30, ~~2017~~2022 was ~~$169,488,~~$873,517, compared to ~~$115,006,~~$741,083, for the same period in ~~2016,~~2021, and gross profit percentages were approximately ~~28%~~63% and ~~27%~~60% for the three months ended ~~September~~June 30, ~~2017~~2022 and ~~2016,~~2021, respectively. ~~Cost of sales for radiochemical products~~This increased ~~to $436,019 for the three months ended September 30, 2017, as compared to $318,388 for the same period in 2016. This~~gross profit percentage is ~~an increase of $117,631, or approximately 37%, and was primarily the~~a result of increased sales ~~volume~~of our new generic sodium iodine I-131 drug product, which carries a higher gross margin, and continued improvements of utilization of raw ~~material purchases in this segment in the three-month comparison.~~materials. Operating expense for this segment increased to ~~$55,581~~$367,887 for the three months ended ~~September~~June 30, ~~2017,~~2022, compared to ~~$24,054~~$336,627 for the same period in ~~2016.~~2021. This increase in operating expense of ~~$31,527,~~$31,260, or approximately ~~131%~~9%, iswas primarily due to increased costs for labor costs, production ~~supply costs, consulting costs~~supplies, and ~~expense for leased equipment for the three-month period ended September 30, 2017, as compared to the same period in 2016.~~advertising expense. This segment reported net income of ~~$113,906~~$505,630 for the three months ended ~~September~~June 30, ~~2017,~~2022, as compared to net income of ~~$90,953~~$404,457 for the same period in ~~2016.~~2021. The increase in net income of ~~$22,953, or approximately 25%,~~$101,173 is the result of the ~~significant~~ increase ~~as discussed above,~~ in ~~revenue for this segment in the period-to-period comparison.~~revenue.

Within this segment, we currently distribute our Sodium Iodide Iodine-131 as a radiochemical product. This product is being compounded in the practice of radiopharmacy into an oral solution or capsules for use in the treatment and diagnosis of diseases of the thyroid, thyroid cancer, and hyperthyroidism, and for use in investigational and clinical trials for the treatment of breast, lung, prostate, and ovarian cancers. In November 2016, we submitted an aNDA to the FDA for a sodium iodide (I-131) radiopharmaceutical product. The FDA has accepted our application and provided the Company a target approval date in February 2018. Subsequent to that, the FDA granted the Company’s request for an expedited review of the product which could shorten the approval time for this product.

This is the first of several potential generic drug products we plan to submit to the FDA in the coming years. We believe that the product enhancements we have made, in addition to the generic drug products we plan to submit to the FDA, should increase future sales in this business segment.

Cobalt Products. Revenue from the sale of ~~cobalt products~~Cobalt Products for the three months ended ~~September~~June 30, ~~2017~~2022 was ~~$116,750,~~$99,146, compared to ~~$67,653,~~$576,994, for the same period in ~~2016.~~2021. This represents ~~an increase~~a decrease of ~~$49,097,~~$477,848, or approximately ~~73%~~83%. ~~Our~~The decrease was primarily due to the timing of cobalt sealed source manufacturing ~~generates~~sales. Large value sales of high activity cobalt sources occur at somewhat random times throughout the ~~majority~~year. Frequently the timing of ~~revenue in this segment~~these sales can have a significant impact on period comparisons.
In October 2014, we entered into a ten-year agreement with the DOE for the irradiation of cobalt targets. It takes many years to irradiate these cobalt targets to the desired level of activity and ~~these sealed source sales largely depend on our ability to procure cobalt target material from the DOE’s Advanced Test Reactor (ATR). Although~~ we ~~have not been able to obtain~~anticipated having high specific activity cobalt available for our customers in 2020. However, the material ~~from~~had lower than expected activity and further receipt of material was delayed until about June 2021. At that point the ~~ATR reactor since late 2013, periodically~~material still had lower than expected activity, and we ~~are~~reached an agreement with the DOE to purchase the material at a discounted rate. Periodically we have been able to acquire recycled material that can be used to manufacture sealed sources for customers, and in some instances, our customers have supplied their own cobalt material for source fabrication. ~~For~~We also have access to additional low specific activity material produced by the ~~three months ended September 30, 2017, we manufactured sealed sources for several customers using recycled material. In March of 2017 we completed a purchase agreement for some~~DOE and expect to obtain, process, and sell additional cobalt ~~material from~~products as a ~~supplier and we expect that material will be delivered to us in late 2017 and early 2018. In~~result during the ~~meantime, the limited availability~~remainder of cobalt material will continue to directly impact our ability to manufacture high activity sealed sources in this business segment. Once the cobalt from the alternate supplier and the material currently undergoing irradiation at the ATR becomes available in 2018, we anticipate significantly increased sales in this business segment.2022.

~~In October 2014, we~~We have entered into ~~a ten-year agreement with the DOE for the irradiation of~~ cobalt targets. It takes approximately two to three years to irradiate the cobalt targets to the desired level of activity and we anticipate having high specific activity cobalt available to our customers beginning in late 2018 and every year thereafter through at least 2024. We are also purchasing some bulk cobalt from another supplier which will help supplement cobalt produced in the ATR and should further increase our product source sales within this segment.

~~Additionally, during 2015 and 2016, we entered into cobalt-60 supply~~purchase agreements with several customers. Pursuant to these contracts, we will supply some bulk cobalt-60 toand provide sealed source manufacturing for the ~~customers and, in~~customers. The terms of these cobalt contracts require some ~~instances, will provide on-going services with respect to the cobalt sales.~~advance progress payments from each customer. The funding received under these contracts has been recorded as unearned revenue under short- and long-term liabilities in our consolidated ~~balance sheets. We will begin recognizing~~financial statements. For the ~~revenue~~ three months ended June 30, 2022 and 2021, we recognized approximately $16,311 and $150,090, respectively when ~~actual sales begin in 2018. Until~~ we ~~are able to ship the~~fulfilled contract performance objectives by supplying sealed sources manufactured with cobalt ~~material currently under irradiation at~~from the ATR ~~we will rely on obtaining material from other sources~~or alternate suppliers.
Cost of sales for the three months ended June 30, 2022, was $26,014, as compared to ~~fulfill some of our customer demand during 2017 and 2018.~~

~~As of September 30, 2017, we continued to hold many in-progress old design cobalt targets at~~$263,948, for the ~~ATR. We believe that the older design targets we hold at the ATR and that we report as inventory, hold significant but varying market values~~same period in excess of their current carrying values and we concluded that no impairment existed at that time. We will periodically continue to review the residual value of this cobalt material for potential impairment and make adjustments as deemed appropriate

21

2021. Gross profit for cobalt products for the three months ended ~~September~~June 30, ~~2017~~2022, was ~~$102,351,~~$73,132 compared to ~~$31,714~~$313,046 for the same period in ~~2016.~~2021. This is ~~an increase~~a decrease of ~~$70,637,~~$239,914, or approximately ~~223%~~77% and is ~~primarily~~ attributable to ~~our increase~~a decrease in ~~sealed~~ source ~~sales~~manufacturing for the three months ended ~~September~~June 30, ~~2017,~~2022, as compared to the same period in 2016. We also reported $25,000 of income from expended source disposal activities for the three-month period ended September 30, 2017, whereas we had no source disposal income to report for the same prior year period.2021. Our gross profit percentages were approximately ~~88%~~74% and ~~47%~~54% for the three-month periods ~~ending September~~ended June 30, ~~2017~~2022 and ~~2016,~~2021, respectively. The increase in the gross profit percentage for the three months ended June 30, 2022 is primarily due to decreased costs of raw material used in the manufacture of sealed sources. Operating expense in this segment ~~decreased slightly~~increased to ~~$36,121~~$115,464 for the three months ended ~~September~~June 30, ~~2017,~~2022, from ~~$36,230~~$104,465 for the same period in ~~2016.~~2021. This is ~~a slight decrease~~an increase of ~~$109, and the~~$10,999, or approximately 11%. This increase in operating ~~costs in this segment remained constant for the period-to-period comparison. Our net income for cobalt products was $66,229~~expenses for the three months ended ~~September~~June 30, ~~2017,~~2022 is due to increased equipment expenses and labor expenses. Our net loss for Cobalt Products was $42,332 for the three months ended June 30, 2022, as compared to a net ~~loss~~income of ~~$4,516~~$208,581 for the same period in ~~2016.~~2021. The ~~increase~~decrease in ~~net~~ income of ~~$70,745,~~$250,913, or approximately 120%, was ~~directly~~ attributable to the ~~increase~~decrease in ~~both~~revenue from cobalt sealed source ~~sales and expended source disposal services income as well as holding operating costs at a steady level~~manufacturing.
Nuclear Medicine Standards. Revenue from Nuclear Medicine Standards for the three months ended ~~September~~June 30, ~~2017, as~~2022, was $955,623, compared to ~~the same period in 2016.~~

~~Nuclear Medicine Standards~~~~. Revenue from nuclear medicine products for the three months ended September 30, 2017 was $808,148 compared to $804,382~~$954,693 for the same period in ~~2016.~~2021. This represents ~~a slight~~an increase in revenue of ~~$3,766,~~$930, or less than 1%. ~~As discussed above, due to a change in the member ownership~~
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Cost of RadQual, we began reporting our investment in RadQual on a consolidated basis. Therefore, revenue in this segment includes our sales to RadQual prior to August 10, 2017, all sales of RadQual from August 10 to September 30, 2017 and sales of TI Services, a 50/50 joint venture that we formed with RadQual in December 2010, to distribute products and services for nuclear medicine, nuclear cardiology and PET imaging. All intercompany sales for the consolidated period have been eliminated. The table below presents consolidated sales for the three months ended September 30, 2017 and sales reported for the three months ended September 30. 2016:

For the three-
months ended
September 30,

For the three-
months ended
September 30,

2017

2016

$ change

% change

Consolidated

Nuclear Medicine Standards Sales

$
808,148

$
804,382

$
3,766

0.47%

Our sales to RadQual for the three months ending September 30, 2017 were $188,653. Sales, net of intercompany sales, reported by TI Services, our 50% joint venture with RadQual, for the same three-month period were $259,533, and sales reported by RadQual, net of intercompany sales, for the three months ended September 30, 2017, were $359,962. Total sales for our ~~nuclear medicine~~Nuclear Medicine Standards segment for the three months ended ~~September~~June 30, ~~2017 were $808,148. Total sales~~2022, was $501,742, as compared to $420,894 for the same period in ~~2016 were $804,382. This is a slight~~2021. The increase of $3,766, or less than 1%. We anticipate that our sales through RadQual will remain strong and that, because of the new RadQual member ownership, we will have significant future opportunities to work on product development and customer service improvements. Additionally, we will continue to work with TI Services on marketing strategies to boost flood source sales and sales of other medical supplies through TI Services.

~~Cost of sales for our nuclear medicine standards segment for the three months ended September 30, 2017 was $444,346, as compared to $500,609 for the same period in 2016. The decrease~~ in cost of sales in the period-to-period comparison isof $80,848, or 19%, was due to ~~a decrease in scrapped material as well as cost of sales eliminated~~increased costs for ~~the period of consolidation in 2017, with no similar elimination for~~supplies and raw materials during the three-month period ended ~~September~~June 30, ~~2016.~~2022, as compared to the same period in 2021. Gross profit for our nuclear medicine standards segment for the three months ended ~~September~~June 30, ~~2017~~2022 was ~~$363,802~~$453,881 compared to ~~$303,773~~$533,799 for the same period in ~~2016.~~2021, and gross profit percentages were approximately 47% and 56% for the three months ended June 30, 2022 and 2021, respectively. This is ~~an increase~~a decrease in gross profit of ~~$60,029,~~$79,918, or approximately ~~20%~~15%. The ~~increase~~decrease in gross profit in the period-to-period comparison is primarily the result of ~~the slight increase in revenue~~increased costs for supplies and ~~the decrease reported in total~~raw materials attributable to cost ~~of sales in the period-to-period comparison.~~inflation. We expect these increased costs to continue going forward.

Operating expense for this segment for the three months ended ~~September~~June 30, ~~2017~~2022 increased to ~~$243,070,~~$480,025, from ~~$125,508~~$423,714 for the same period in ~~2016.~~2021. This is an increase of ~~$117,562,~~56,311, or approximately ~~94%~~13%, and is the result of increased research and development costs in the three months ended June 30, 2022. Operating expenses includes ~~consolidated net operating~~non-controlling member interest expense ~~reported for~~attributable to RadQual and TI Services of ~~$95,926,~~$0 for the three months ended ~~September~~June 30, ~~2017, whereas there was no consolidated operating expense recorded for RadQual~~2022 compared with $17,055 for the ~~same period~~three months ended June 30, 2021. In July 2021, we purchased the remaining 75.5% interest in ~~2016.~~RadQual; this resulted in RadQual and TI Services becoming our fully owned subsidiaries. Net ~~income~~loss for this segment for the three months ended ~~September~~June 30, ~~2017~~2022 was ~~$124,876,~~$26,144, compared to ~~$178,265~~net income $110,085 for the same period in ~~2016.~~2021. This ~~is a~~ decrease in net income of ~~$53,389,~~$136,229, or approximately ~~30% and is the result of the increased operating expense reported as a result of consolidation of RadQual for the three months ended September 30, 2017, as compared to the same period in 2016.~~

22

~~Radiological Services~~. Our radiological services segment consists of radiological field service work and gemstone processing. Revenue from all radiological services for the three months ended September 30, 2017 was $349,565, compared to $99,807 for the same period in 2016, an increase of $249,758 or approximately 250%. Radiological field services revenue in this segment was $285,863 for the three months ended September 30, 2017, and was $2,500 for the same period in 2016. This is an increase of $283,363,123% and is primarily the result of ~~completing~~increased cost of sales and increased operating expenses.
Radiological Services. Starting in 2022, due to drastically decreased activity in the segment, all remaining activities in our Radiological Services is reported in our Nuclear Medicine Standards segment.
In January 2020, we notified our gemstone processing customer that the service contract with them was being terminated because the volume of gemstones sent for processing did not meet contract minimums. The termination activities and wrap up of this service substantially occurred in 2021 and the Company saw a steady decline in revenue from this service as production was wrapped up. In the first half of 2022, we converted the spaces in the facility that were previously used to perform this contract work into expanded Nuclear Medicine new product manufacturing. The loss in revenue expected from termination of the gemstone processing agreement is expected to be more than compensated for by the expansion of new nuclear medicine source ~~recovery jobs performed under~~products.
Revenue from field service work for the ~~DOE’s OSRP. The~~DOE had accounted for the majority of revenue in this segment. However, Radiological Field Services work was terminated in 2020 and we did not generate any Radiological Field Services revenue in 2021 or 2022.We have removed this type of activity from our ~~field service revenue is generated by the performance of activities~~NRC license and do not expect to perform this in connection with the OSRP, and the increase in the revenue comparison is the result of these contracts being awarded to us. These contracts are awarded sporadically over time and thus will continue to create fluctuations in the period-to-period comparisons in field service revenue. Revenue generated from gemstone processing was $63,702 forfuture years.
Fluorine Products. For the three months ended ~~September~~June 30, ~~2017,~~2022 and was $97,307 for the same period in 2016. This is a decrease of $33,605, or approximately 35%. This decrease is due to the decline in volume of material shipped to us for processing during the three months ended SeptemberJune 30, ~~2017 as compared to the same period in 2016. We have historically experienced these fluctuations, which are based on changes in current market demand for luxury items such as jewelry and~~2021, we ~~expect these fluctuations to continue.~~

~~The following table presents radiological services~~had no revenue for ~~the three months ended September 30, 2017 and 2016:~~

For the three-
months ended
September 30,

For the three-
months ended
September 30,

Radiological Services

2017

2016

% change
Gemstone Processing

$
63,702

$
97,307

-35%
Radiological Field Services

285,863

2,500

11335%

$
349,565

$
99,807

250%

~~As mentioned above, the majority of~~ our field service revenue is generated by the performance of activities in connection with the DOE’s OSRP which are awarded on a periodic basis. These activities include services to support recovery of disused sources and installation or removal of certain cobalt or cesium units. Based on the number of orphan sources identified both in the U.S. and internationally that will need to be recovered and disposed of, we expect this source removal and installation work to continue through the end of 2017. We have secured several new contracts with the OSRP that will be completed during the upcoming months and we expect that there will be additional OSRP work forthcoming in 2018.

In addition to the OSRP work performed, we have also submitted bids to perform work under contract with the International Atomic Energy Agency (IAEA) for the removal of disused sources in several locations in South America. During the three-month period ending September 30, 2017, we were awarded two of these recovery jobs which are scheduled for completion prior to the end of the first quarter in 2018.

We have designed and built two mobile hot cell units that are adaptable for use in various source recovery environments and both have been successfully demonstrated in the field. In addition, we received an amendment to our NRC license that allows us to use these hot cells to perform source removal services on a wide variety of cobalt radiation therapy units. The mobile hot cells and license amendment have been used to support continued expansion of our field service activities. Based upon contracts currently in place and the amount of anticipated future contract opportunities for this type of work, we expect that field services will be the primary source of revenue within this segment during the remainder of 2017.

Gross profit for this segment for the three months ended September 30, 2017 was $190,964, compared to $49,460 for the same period in 2016. The increase in gross profit of $149,504, or approximately 286%, is the result of the increased field services activities reported in this segment for the three months ended September 30, 2017, as compared to the same period in 2016. Operating expense for the three months ended September 30, 2017 was $55,720, as compared to $22,916 for the same period in 2016. This increase of $32,804, or approximately 143%, was the result of increased indirect wage expense and increased training expense recorded for the three-month period ended September 30, 2017 as compared to the same period in 2016.

Fluorine Products. ~~There was no revenue to report from the fluorine products segment for the three months ended September 30, 2017, or for the same period in 2016.~~ segment. During the three months ended ~~September~~June 30, ~~2017,~~2022, we incurred ~~$37,135~~$42,343 of expense related to items in support of future planning and design for the proposed de-conversion facility, as compared to ~~$102,055~~$31,627 for the same three-month period in ~~2016. The decrease~~2021. This is an increase of ~~$64,920, or approximately 64%~~34% in the period-to-period comparison and is the result of ~~decreased interest cost and decreased consulting~~increased professional services costs ~~recorded in the period-to-period comparison.~~related to exploring options for possible renewal of work on this project.

23

We established the Fluorine Products segment in 2004 to support production and sale of the gases produced using our Fluorine Extraction Process (FEP). Our FEP patents offer a unique opportunity to provide certain high-purity fluoride compounds while also offering a “for fee” de-conversion service to the uranium enrichment industry. From 2004 to 2012, we used a pilot facility to develop production processes for various high-purity products and to test methods of scaling up the size of FEP production in support of the planned de-conversion facility in Lea County, New Mexico. In 2012, we completed our testing of individual components and analytical processes and in 2013 we closed the pilot plant facility. Also, in 2013, we made the decision to place continued formal design work on the proposed de-conversion facilityFEP. The project has been placed on hold ~~until~~since 2013 and we ~~are able~~will continue to ~~secure additional de-conversion services contracts. Until such time that work resumes on the project we will~~ limit our expenditures to essential items such as maintenance of the NRC license, land use agreements, communication with our prospective FEP product customers, and interface with the State of New Mexico and Lea County ~~officials.~~

officials until such time that we decide to resume the project.
~~Transportation~~. ~~We reported $20,731 in revenue from transportation services~~
Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021
Revenue for the ~~three months~~six-month period ended ~~September~~June 30, ~~2017,~~2022 was $5,242,249, as compared to ~~$6,027~~$4,752,408 for the same period in 2016. We primarily use our transportation services to support the jobs performed in our cobalt products and radiological services business segments and revenue generated in this business segment is typically dependent on opportunities in these other two segments. During the three-month period ended September 30, 2017, we reported increased activity and revenue in both our cobalt products and our radiological services segments which directly affected the sales opportunities for our transportation segment. Gross profit was $19,910 for the three months ended September 30, 2017, compared to $3,019 for the same period in 2016, and operating expense was $19,495 for the three months ended September 30, 2017, compared to $27,173 for the same period in 2016. This decrease in operating expense of $7,678, or approximately 28%, is the result of decreased insurance cost and decreased repair and maintenance cost. Net income reported for this segment was $415 for the three months ended September 30, 2017, and net loss was $24,156 for the same period in 2016. There are numerous regulations that apply to, and agencies which monitor, the security and tracking of cobalt shipments and our transportation segment specializes in the transport of hazardous, radioactive materials, including large cobalt shipments. We believe that as the anticipated growth in our other business segments occurs, particularly cobalt products and radiological services, we will see increased revenue in our transportation segment as well.

~~Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016~~

~~Revenue for the nine-month period ended September 30, 2017 was $5,520,733, as compared to $4,801,672 for the same period in 2016,~~2021, an increase of ~~$719,061,~~$489,841, or approximately ~~15%~~10%. The performance of all our business segments for the ~~nine-month~~six-month period is discussed in further detail below.

The following table presents a period-to-period comparison of total revenue by segment for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~September~~June 30, ~~2016:~~2021:

For the nine-
months ended
September 30,

For the nine-
months ended
September 30,

For the six-
months ended
June 30,

For the six-
months ended
June 30,

Sale of Product

2017

2016

$ change

% change
2022 2021 $ change % change
Radiochemical Products

$
1,777,903

$
1,216,587

$
561,316

46%
$ 3,005,962 $ 1,889,386 $ 1,116,576 59%
Cobalt Products

420,816

573,308

(152,492)

(27%)
271,052 695,367 (424,315) -61%
Nuclear Medicine Standards

2,451,252

2,454,399

(3,147)

0%
1,965,235 2,145,642 (180,407) -8%
Radiological Services

844,898

460,874

384,024

83%
Fluorine Products

-

-

-

0%
- 22,013 (22,013) -100%
Transportation

25,864

96,504

(70,640)

(73%)
Total Segments

5,520,733

4,801,672

719,061

15%
Total Consolidated

$
5,520,733

$
4,801,672

$
719,061

15%
$ 5,242,249 $ 4,752,408 $ 489,841 10%

Gross profit for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2017~~2022 was ~~$2,351,525,~~$3,077,273, compared to ~~$2,024,809,~~$2,749,086, for the same period in ~~2016.~~2021. This represents an increase of ~~$326,716~~$328,187 or approximately ~~16%~~12%.

21

24

The following table presents cost of sales and gross profit data for each of our business segments for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016:~~2021:

For the nine-
months ended
September 30,

% of
Total Sales

For the nine-
months ended
September 30,

% of
Total Sales

For the six-
months ended
June 30,

% of
Total Sales

For the six-
months ended
June 30,

% of
Total Sales

2017

2017

2016

2016
2022 2022 2021 2021
Total Sales

$
5,520,733

$
4,801,672

$ 5,242,249 $ 4,752,408
Cost of Sales

Radiochemical Products

$
1,290,184

23%

$
891,009

19%
$ 1,068,887 20% $ 792,609 17%
Cobalt Products

74,898

1%

119,798

2%
82,525 2% 307,201 6%
Nuclear Medicine Standards

1,458,261

26%

1,537,686

32%
1,013,564 19% 903,512 19%
Radiological Services

341,998

6%

207,425

4%
Fluorine Products

-

0%

-

0%
- 0% - 0%
Transportation

3,867

0%

20,945

0%
Total Segments

3,169,208

56%

2,776,863

57%
2,164,976 41% 2,003,322 42%

Gross Profit

$
2,351,525

$
2,024,809

$ 3,077,273 $ 2,749,086
Gross Profit %

43%

42%

59% 58%

Operating expenses were ~~$4,049,394~~$3,805,425 for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2017,~~2022, compared to ~~$3,120,373~~$3,184,892 for the same period in ~~2016.~~2021. This represents an increase of ~~$929,021,~~$620,533, or approximately ~~30%~~19%. This increase ~~in operating expense~~ is ~~largely~~primarily due to ~~legal~~an approximate 34% increase in Salaries and Contract Labor costs and a 169% increase in Research and Development costs. The increase in Salaries and Contract Labor costs is a result of increased equity-based compensation and increases to labor rates incurred during the ~~nine~~six months ended ~~September~~June 30, 2017, and is discussed in more detail below. Salaries and contract labor expense increased by $212,970, or approximately 16%, which is the result of salary and wage increases made during the nine months ended September 30, 20172022, as compared to the same period in ~~2016. In addition, non-cash equity compensation expense recorded for the nine-month period ended September 30, 2017 was $122,514 as compared~~2021. The increase in Research and Development cost is due to ~~$74,572 for the same period~~increased activity in 2016. This is an increase of $47,942, and is the result of equity compensation recorded for 11,500,000 options granted to employees and non-employees in July 2017. Non-cash equity compensation is calculated based on unexercised and outstanding stock options, warrants, and other equity based instruments. As these instruments become fully vested, are exercised or expire the related non-cash compensation expense will decrease.

General administrative expense increased to $2,241,749 for the nine months ending September 30, 2017 from $1,391,551 for the same period in 2016. This is an increase of $850,198, or approximately 61% and is the result of significant increased legal costsproduct development during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, as compared to the same period in 2016. In March 2016, we submitted a demand for arbitration letter to Alpha Omega Services (AOS) and requested arbitration before the American Arbitration Association in an attempt to recover monies paid to AOS for a deposit on a shipping container and for lost revenue as a result of not owning the container. Arbitration proceedings took place on several occasions from March through August of 2017. We are anticipating the matter to be finalized in late in 2017. Research and development expense decreased to $267,563 for the nine-month period ended September 30, 2017, from $401,710 for the same period in 2016. This is a decrease of $134,147 or approximately 33% and is the result of decreased costs incurred in preparing our aNDA submission to the FDA.2021.

The following table shows total operating expenses for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2017~~2022 and ~~2016:~~2021:

For the nine-
months ended
September 30,

For the nine-
months ended
September 30,

For the six-
months ended
June 30,

For the six-
months ended
June 30,

Operating Costs and Expenses:

2017

2016

% change

$ change
2022 2021 % change $ change
Salaries and Contract Labor

$
1,540,082

$
1,327,112

16%

$
212,970
$ 1,735,221 $ 1,293,948 34% $ 441,273
General, Administrative and Consulting

2,241,749

1,391,551

61%

850,198
1,776,148 1,781,728 0% (5,580)
Research and Development

267,563

401,710

-33%

(134,147)
294,056 109,216 169% 184,840
Total operating expenses

$
4,049,394

$
3,120,373

30%

$
929,021
$ 3,805,425 $ 3,184,892 19% $ 620,533

Other income was $2,028,568 for the six months ended June 30, 2022, as compared to $175,476 for the same period in 2021. This is an increase of $1,853,092, or approximately 1056%, primarily due to a $1,797,978 gain on sale of assets to Pharmalogic Idaho, LLC. In February 2022, we entered into an Asset Purchase Agreement with Pharmalogic Idaho, LLC, pursuant to which we sold certain assets for $4.0 million in cash. The Assets consisted primarily of manufacturing equipment and a sublease acquired by the Company in connection with the previously announced termination of the manufacturing and supply agreement with another company.
Interest expense for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 was ~~$391,524,~~$318,144, compared to ~~$348,426~~$409,747 for the same period in ~~2016.~~2021. This is ~~an increase~~a decrease of ~~$43,098,~~$91,603, or approximately ~~12%~~22%. Interest expense ~~reported for this nine-month period~~ includes ~~interest accrued and paid to holders of our convertible debt issued in July 2012 and~~ dividends accrued on our Series C Preferred Stock. Interest expense related to the convertible debt has been allocated over the life of the Note to general operations and to research and development based on the use of the funding proceeds. The remaining debt matured on July 27, 2017, at which time we paid $255,000 in principal and $6,623 in interest to the remaining Note holders. As discussed in detail below, we issued Series C Preferred Stock in February and May of 2017. For the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2022, we accrued dividends payable of ~~$146,288~~$121,890 which have been

25

recorded as interest expense. Additionally, non-cash interest expense in the amount of ~~$75,007 was recorded~~$53,096 for ~~this same period~~the accretion of the beneficial conversion feature of the 2019 Promissory Note and $75,037 for the issuance of warrants ~~related~~in conjunction with the 2019 Promissory Note were recorded for the six months ended June 30, 2022. See Note 7 “Debt” to ~~the preferred stock issuances. Interest was also paid on a loan for a vehicle purchased in May 2016.~~

~~As discussed in Note 4 to the accompanying~~our unaudited consolidated ~~unaudited~~ financial statements in ~~August 2017, as a result of a change in~~this Quarterly Report for additional information about our indebtedness and the member ownership of RadQual, the net assets and liabilities of RadQual were re-valued based on the purchase price of 75.5% of RadQual’s member units by certain affiliates of the Company. As a result of that fair market valuation, our 24.5% investment in RadQual was valued at $489,999 and we recorded a Loss on Investment in the amount of $946,884, per ASC 805, Accounting for Business Combinations. Subsequent to the ownership change in RadQual, we changed from recording our investment in RadQual using the equity method of accounting to the consolidation method of accounting. In accordance with ASC 810, from the date of the acquisition of the remaining member units of RadQual by certain of the Company’s affiliates, we are accounting for this change prospectively.associated interest expense.

Our net ~~loss~~income for the ~~nine-month period~~six months ended ~~September~~June 30, ~~2017,~~2022, was ~~$2,970,628 as~~$982,997, compared to ~~$1,359,302~~net loss of $782,539, for the same period in ~~2016.~~2021. This is an increase in ~~loss~~income of ~~$1,611,326 or approximately 119%. This increase in net loss was~~$1,765,536 is largely the result of ~~increased legal~~the approximate $1.8 million gain on sale of assets. Additionally the increase in income is the result of the increase in revenue in our Radiochemical Products segment offset by the increase in operating expense ~~incurred for arbitration proceedings, the loss on investment discussed above,~~from salaries and ~~increased interest expense recorded~~contract labor and expenses from research and development for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2022, as compared to the same period in ~~2016.~~2021.

Radiochemical Products. Revenue from the sale of ~~radiochemical products~~Radiochemical Products for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2017~~2022, was ~~$1,777,903~~$3,005,962 compared to ~~$1,216,587~~$1,889,386 for the same period in ~~2016.~~2021. This is an increase of ~~$561,316,~~$1,116,576, or approximately ~~46%~~59%. The increase is the result of increased sales to most of our customers and further enhanced by a reduction in sales by our competitor in the first quarter of 2022. The reduction in sales by our competitor resulted from a short-term shutdown of a European reactor facility that normally supplied their sodium iodide I-131 during the first quarter of 2022. The increase is ~~primarily~~also the result of increased sales of our new generic sodium iodide ~~iodine-131~~I-131 drug product. ~~One of the reasons~~We expect continued sales growth for this increase in sales was a major competitor stopping the supply of sodium iodine product in October 2016. We have submitted an aNDA for this sodium iodine product to the FDA for approval as a generic drug product for use in the treatment and diagnosis of diseases of the thyroid, thyroid cancer, and hyperthyroidism. This is our first drug product submission to the FDA and we anticipate the submission of several additional generic drug products to the FDA in the future. We believe that once we obtain FDA approval and begin commercial sales of this new iodine product our sales in this segment will show significant growth. Our radiochemical grade sodium iodide is also used in investigational and clinical trials for the treatment of breast, lung, prostate, and ovarian cancers.Radiochemical Products going forward.

22
Cost of sales was ~~$1,290,184~~$1,068,887 for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2017,~~2022, and ~~$891,009~~$792,609 for the same period in ~~2016.~~2021. This is an increase of ~~$399,175,~~$276,278, or approximately ~~45% and~~35%. This increase is ~~directly related to~~primarily the result increased ~~material purchases to support~~sales for the ~~increase in sodium iodine sales.~~ period.
Gross profit percentages onfor our ~~sodium iodine product~~Radiochemical Products for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 were approximately ~~27% for both periods. We anticipate, when we launch~~64% and 58%, respectively. This increased gross profit percentage is a result of increased sales of our new generic sodium iodine I-131 drug product, ~~that we will see~~which carries a ~~significant increase in our~~higher gross ~~profit as a result~~margin, and continued improvements of ~~increased volume~~utilization of ~~product processed and an increase in the unit price of the drug product.~~raw materials. Operating expense for this segment for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2017~~2022 was ~~$148,661,~~$758,760, compared to ~~$75,154~~$687,895 for the same period in ~~2016.~~2021. This is an increase of ~~$73,507,~~$70,865, or approximately ~~98%~~10%, and is primarily due to ~~FDA fees incurred~~increased costs for labor costs, production supplies, advertising expense, and professional services. As discussed above, other income from the ~~submission~~Radiochemical Products segment included a $1,797,978 gain on sale of ~~an aNDA, increased production~~manufacturing equipment and a sublease acquired by the Company in connection with the previously announced termination of the manufacturing and supply ~~cost and increased labor costs. The FDA costs are being amortized over the period of time it is expected to take the FDA to review the application.~~ agreement with another company. Net income for this segment increased to ~~$339,059~~$2,976,293 for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2017,~~2022, from ~~$250,424~~$408,882 for the same period in ~~2016.~~2021. This increase of ~~$88,635,~~$2,567,411, or approximately ~~35%~~628%, is ~~due to~~ the ~~increased sales reported~~result of the gain on sale of assets and the 59% increase in ~~this segment for the nine months ended September 30, 2017, as compared to the same period in 2016.~~revenue

Cobalt Products. ~~Revenue~~Revenues from the sale of ~~cobalt products~~Cobalt Products for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2017 was $420,816,~~2022 were $271,052, compared to ~~$573,308~~$695,367 for the same period in ~~2016.~~2021. This is a decrease of ~~$152,492,~~$424,315, or approximately ~~27%~~61%, and is the result of decreased ~~sealed source sales in the nine-month comparison. Our~~ cobalt sealed source manufacturing ~~generates~~and cobalt recycling. The decrease was primarily due to the ~~majority~~timing of ~~revenue in this segment and these~~cobalt sealed source manufacturing sales. Large value sales ~~largely depend on our ability to procure~~of high specific activity (HSA) bulk cobalt material from the DOE’s Advanced Test Reactor (ATR). Although we have not been able to obtain HSA cobalt material from the ATR reactor since late 2013, periodically we are able to acquire recycled material that can be used to manufacture sealed sources for customers, and in some instances, our customers have supplied their own cobalt material for source fabrication. During March 2017, we completed a purchase agreement for some additional cobalt material from an alternate supplier and that material should be delivered to us in late 2017 and the first half of 2018. In the meantime, the limited availability of cobalt material will continue to directly impact our ability to generate sealed source sales. However, once the cobalt from the alternate supplier is delivered in late 2017 and the material currently undergoing irradiation at the ATR becomes available in late 2018, we anticipate significantly increased sales in this business segment.

As previously discussed, in October 2014 we entered into a ten-year agreement with the DOE for the irradiation of a new design of cobalt targets and, as a result of this activity, we anticipate having high specific activity cobalt ~~available to our customers beginning in 2018 and every year thereafter through~~sources occur at ~~least 2024. Until that time, we will continue to work with alternate cobalt suppliers to obtain~~somewhat random times throughout the ~~cobalt material to meet future short-term customer needs.~~year. Frequently the timing of these sales can have a significant impact on period comparisons.

During 2015, we entered into cobalt-60 supply agreements with several customers. ~~Under the~~The terms of ~~these contracts we will supply cobalt-60~~the agreements required pre-payments to ~~each customer and,~~secure cobalt material in some cases, will provide on-going services with respect to the cobalt sales. The contracts required an initial commitment fee, plus quarterly progress payments from each customer. The amounts received under these contracts have beenfuture years. Those prepayments were recorded as unearned revenue ~~under both short-term and long-term liabilities~~on our condensed consolidated balance sheet.
Cost of sales for the six months ended June 30, 2022, was $82,525, as compared to $307,201, for the same period in ~~our financial statements.~~

2021. Gross profit for cobalt products for the ~~nine-month period~~six months ended ~~September~~June 30, ~~2017~~2022 was ~~$345,918, as~~$188,527 compared to ~~$453,510~~$388,166 for the same period in ~~2016.~~2021. This is a decrease of ~~$107,592,~~$199,639, or 51%. Our gross profit percentages were approximately ~~24%~~70% and is56% for the ~~result of the significant decrease in sales in the period-to-period comparison.~~six-month periods ended June 30, 2022 and 2021, respectively. Operating expense in this segment ~~decreased~~increased to ~~$124,694,~~$243,934 for the ~~nine-month period~~six months ended ~~September~~June 30, ~~2017,~~2022, from ~~$148,372~~$209,683 for the same period in ~~2016.~~2021. This is ~~a decrease~~an increase of ~~$23,678~~$34,251, or approximately 16% is a result of increased labor expenses and ~~is largely due to decreased indirect wages reported as well as a decrease~~production supply costs in ~~training costs. Net income for~~ the ~~nine~~six months ended ~~September~~June 30, 2017 was $221,224, compared to $305,138 for the same period in 2016. This decrease in net income of $83,914, or approximately 28%, is the direct result of the decline in revenue in this business segment for the period ended September 30, 2017,2022 as compared to the same period in ~~2016.~~

~~Nuclear Medicine Standards~~. ~~Revenue from nuclear medicine products~~2021. Our net loss for Cobalt Products was $55,407 for the ~~nine-month period~~six months ended ~~September~~June 30, ~~2017 was $2,451,252~~2022, as compared to ~~$2,454,399~~a net income of $178,484 for the same period in ~~2016.~~2021. The decrease in net income of $233,891 or approximately 131%, was attributable to the decreased cobalt sealed source manufacturing sales for the six months ended June 30, 2022, as compared to the same period in 2021.
Nuclear Medicine Standards. Revenue from Nuclear Medicine Standards for the six-month period ended June 30, 2022 was $1,965,235 compared to $2,145,642 for the same period in 2021. This represents a decrease in revenue attributable to this segment of ~~$3,147,~~$180,407, or ~~less than 1%.~~

Because of the change in ownership interest in RadQual discussed above, as of August 10, 2017, we began reporting our investment in RadQual using the consolidation method of accounting, per FASB Standard for Business Combinations (ASC 805)approximately 8%. ~~In the consolidation process, we have eliminated intercompany transactions that would have otherwise generated intercompany profit.~~

The ~~table below presents nuclear medicine standards revenue, net of intercompany~~decrease in sales for the ~~nine-month~~ period ended ~~September~~June 30, ~~2017 and~~2022 was due to continued slow demand of nuclear medicine ~~standards revenue~~imaging products resulting from the continued adverse impact of COVID-19 upon our customers and clinics during the six months ended June 30, 2022.
Gross profit for the ~~nine-month~~six-month period ended ~~September~~June 30,

For the nine-
months ended
September 30,

For the nine-
months ended
September 30,

2017

2016

$ change

% change

Consolidated

Nuclear Medicine Standards Sales

$
2,451,252

$
2,454,399

$
(3,147)

-0.13%

~~Our sales~~ 2022 was $951,671, as compared to RadQual for the nine months ending September 30, 2017 were $1,277,036. Sales, net of intercompany sales, reported by TI Services, our 50% joint venture with RadQual, were $814,254, and sales reported by RadQual, net of intercompany sales, were $359,962. Total sales for our nuclear medicine segment for the nine months ended September 30, 2017 were $2,451,252. Total sales$1,242,130 for the same period in ~~2016 were $2,454,399. This is~~2021, a ~~slight~~ decrease of ~~$3,147, or less than 1%.~~

~~TI Services sales dropped by $30,401,~~$290,459, or approximately 4%, to $814,254 for the nine-month period ending September 30, 2017 from $844,655 for the same period in 2016. The decreased revenue is the result of the continuing drop in sales of paper products used in nuclear medicine imaging. TI Services sales of flood sources for the nine-month period ended September 30, 2017 remained strong. We have been working closely with RadQual, and will continue that work with the new RadQual management, to develop new products to market through TI Services, while at the same time, implementing cost reduction measures, where appropriate, to decrease operating expense for the joint-venture.

27

~~Gross profit for the nine-month period ended September 30, 2017 was $992,991, as compared to $916,713 for the same period in 2016, an increase of $76,278, or approximately 8%~~23%. Operating expense for this segment for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2017~~2022 increased to ~~$492,625,~~$940,099, from ~~$376,650~~$868,727 for the same period in ~~2016.~~2021. This is an increase of ~~$115,975,~~$71,372 or approximately ~~31%,~~8% and ~~includes $95,926~~is the result of increased research and development costs in the six months ended June 30, 2022. Operating expenses include consolidated ~~operating~~non-controlling member interest expense of ~~RadQual~~$0 for the ~~nine-month period~~six months ended ~~September~~June 30, ~~2017, whereas there was no such consolidated expense~~2022, compared to $112,541, for the ~~same period in 2016.~~six months ended June 30, 2021. Net income for this segment for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2017~~2022, decreased to ~~$504,510, or~~$11,572, approximately 7%97%, from ~~$540,065~~$373,403 for the same ~~nine-month~~six-month period in ~~2016.~~

2021. This decrease is due to decreased sales.
Radiological Services. Starting in 2022, due to drastically decreased activity in the segment, all remaining activities in our Radiological Services is reported in our Nuclear Medicine Standards segment.
In January 2020, we notified our gemstone processing customer that the service contract with them was being terminated because the volume of gemstones sent for processing did not meet contract minimums. The ~~radiological services segment reported~~termination activities and wrap up of this service substantially occurred in 2021 and the Company saw a steady decline in revenue from this service as production was wrapped up. In the first half of ~~$844,898~~2022, we have converted the spaces in the facility that had been used to perform this contract work into expanded Nuclear Medicine new product manufacturing. The loss in revenue expected from termination of the gemstone processing agreement is expected to be more than compensated for by the ~~nine-month period ended September 30, 2017 compared to $460,874 for the same period in 2016. This is an increase~~expansion of ~~$384,024, or approximately 83%.~~ new nuclear medicine source products.
Revenue from field service work ~~performed in connection with~~for the ~~DOE’s OSRP accounts~~DOE had accounted for the majority of revenue in this segment. However, Radiological Field Services did not generate any Radiological Services segment ~~and~~sales in 2022 or 2021. This was ~~approximately $508,000 for~~ the ~~nine~~result the removal of this activity from our NRC license.
23
Fluorine Products. For the six months ended ~~September~~June 30, ~~2017, and approximately $174,000~~2022, we had no revenue related to Fluorine Products compared to $22,013, for the same period in ~~2016. In addition~~2021. These revenues were related to an agreement to provide engineering and technical assistance services related to our fluorine products intellectual property. During the OSRP work performed, we have also submitted bids to perform work under contract with the IAEA for the removal of disused sources in several locations in South America and were awarded two of these jobs. We expect to recognize the revenue from these jobs late in 2017 and during early 2018. As mentioned earlier, the field service contract work offered by the DOE and the IAEA are somewhat sporadic and we expect that, as a result, the revenue comparisons will continue to vary from period-to-period. Gemstone processing revenue for the ninesix months ended ~~September~~June 30, 2017 was $317,488 compared to $268,139 for the same period in 2016. This is an increase of $49,349, or approximately 18% and is the result of larger volumes of material shipped to us for processing during the nine-month period ended September 30, 2017 as compared to the same period in 2016. We believe that these fluctuations are based on current market demand for luxury items such as jewelry and anticipate similar fluctuations to occur in future periods.

~~The following table presents radiological services revenue for the nine-month periods ended September 30, 2017 and September 30, 2016:~~

For the nine-
months ended
September 30,

For the nine-
months ended
September 30,

Radiological Services

2017

2016

% change
Gemstone Processing

$
317,488

$
268,139

18%
Radiological Field Services

527,410

192,735

174%

$
844,898

$
460,874

83%

Gross profit was $502,900 for this segment for the nine months ended September 30, 2017, and $253,449 for the same period in 2016. This is an increase in gross profit of $249,951, or approximately 98% and is primarily the result of increased field services revenue reported in this business segment. Operating costs were $127,831 and $67,078 for the nine months ended September 30, 2017 and 2016, respectively. The increase in operating expense of $60,753, or approximately 91%, is due to increased labor costs and increased depreciation cost reported in the period-to-period comparison. Net income for the nine-month period ending September 30, 2017, was $375,069, as compared to $186,370 for the same period in 2016.

~~Fluorine Products~~. ~~There was no revenue to report from the fluorine products segment for the nine months ended September 30, 2017 or for the same period in 2016. During the nine months ended September 30, 2017,~~2022, we incurred ~~$178,170~~$74,173 of expense related to ~~essential~~ items in support of future planning and design for the proposed de-conversion facility, as compared to ~~$297,355~~$87,153 for the same ~~nine-month~~six-month period in ~~2016. The~~2021. This is a decrease of ~~$119,185, or approximately 40% is~~13% in the result of decreased interest expense reported for the nine-month period ended September 30, 2017 as compared to the same period in 2016. In addition, we recorded approximately $36,000 for waste disposal cost during the nine months ending September 30, 2016, whereas we reported no waste disposal expense during the same nine-month period in 2017. The waste was previously generated by our FEP pilot plant, which had been stored at our Idaho facility since 2013.period-to-period comparison.

We established the Fluorine Products segment in 2004 to support production and sale of the gases produced using our Fluorine Extraction Process (“FEP”), and from 2004 to 2012, we used a pilot facility to develop production processes and test scale-up methods for various high-purity products. In 2012, we completed our testing of individual components and analytical processes and in 2013 we closed the pilot plant facility. Also in 2013, we made the decision to place continued formal design work on the proposed de-conversion facility on hold until we are able to secure contracts for de-conversion services.. We will continue to limit our expenditures to essential items such as maintenance of the NRC license, land use agreements, communication with our prospective FEP product customers, and interface with the State of New Mexico and Lea County officials.

28

~~Transportation~~. Revenue from transportation services for the nine months ended September 30, 2017 was $25,864 compared to $96,504 for the same period in 2016. Revenue in this business segment is directly affected by the activity in our cobalt products and radiological services segments, and, as mentioned earlier, our cobalt product sales are significantly decreased due to the current scarcity of cobalt material. We believe that, as revenues in our cobalt products segment improve, and revenues in our radiological services segment continue to grow, our transportation segment revenues will increase as well. Gross profit was $21,997 for the nine months ended September 30, 2017, compared to $75,559 for the same period in 2016. Operating expense was $65,123 for the nine months ended September 30, 2017, compared to $106,956 for the same period in 2016. We reported $4,500 of proceeds from the sale of a vehicle, for the nine months ended September 30, 2016, and we had no other income to report for the same period in 2017. Net loss for this segment was $43,127 and net loss was $26,898 for the nine months ended September 30, 2017, and 2016, respectively.

LIQUIDITY AND CAPITAL RESOURCES

~~On September~~At June 30, ~~2017,~~2022, we had cash and cash equivalents of ~~$304,597~~$3,025,513 as compared to ~~$314,520~~$474,851 at December 31, ~~2016.~~2021. This is ~~a decrease~~an increase of ~~$9,923.~~$2,550,662 or approximately 537%. For the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2022, net cash used in operating activities was ~~$530,213,~~$951,052 and for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2021, net cash used in operating activities was ~~$269,647.~~$238,773. The increase in cash used in operating activities was a result of increased accounts receivable due to increased revenue and a reduction in accounts payable and accrued liabilities. The increase in cash and cash equivalents at period end in the period-to-period comparison is the ~~combined~~ result of cash paid for inventory, specifically irradiation fees for cobalt targets at the ATR, and a significant decrease in cash payments received on cobalt contracts which are recorded as unearned revenue. The initial terms of these cobalt contracts required a down payment plus continued quarterly progress payments from some customers. These payments are recorded as unearned revenue and will be reported as sales when the cobalt material ships, which is expected to begin in 2018.increased net income.

Inventories at ~~September~~June 30, ~~2017~~2022 totaled ~~$1,788,784,~~$943,645, and inventories at December 31, ~~2016~~2021 totaled ~~$1,476,240. A significant amount of our~~$924,775. Our inventory consists of ~~irradiated cobalt material held at the ATR located outside of Idaho Falls, Idaho. For the nine months ended September 30, 2017, our cobalt inventory accounted for approximately 90% of our~~ work in process ~~inventory,~~material for our Radiochemical Products, Cobalt Products, and includes cobalt targets of an older design as well as irradiated cobalt material under a new contract with the DOE. For the nine months ended September 30, 2016, our cobalt target inventory accounted for approximately 77% of our work in process inventory. We periodically evaluate the carrying value of our older cobalt targets to determine their future market value to the Company. As of September 30, 2017, we determined that these older design cobalt targets continue to hold varying degrees of future market value to the Company and that no impairment of this inventory was necessary.Nuclear Medicine Products segments.

Cash ~~used in~~provided by investing activities was ~~$350,506~~$3,944,800 for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2022, and cash used in investing activities was ~~$57,072~~$191,666 for the same period in ~~2016. Cash used to purchase equipment~~2021. The cash provided in the six months ended June 30, 2022 was ~~approximately $38,000~~ for the ~~nine~~sale of assets for $4,000,000. In February 2022, we entered into an Asset Purchase Agreement with Pharmalogic Idaho, LLC, pursuant to which we sold certain assets for $4,000,000 in cash. The Assets consisted primarily of manufacturing equipment and a sublease acquired by the Company in connection with the previously announced termination of the manufacturing and supply agreement with another company. The cash used in the six months ended ~~September~~June 30, ~~2017, as compared to approximately $68,000~~2021 was for the same period in 2016. We received $109,111 in dividends from our investment in RadQual during the nine-month period ended September 30, 2017, compared to $6,369 for the nine month-period ended September 30, 2016. We reported $500,000 for restricted cash in our consolidated balance sheets which is cash held by RadQual. According to the terms of the Member Interest Purchase Agreement for the purchase of ~~75.5% of the member units of RadQual, the cash is being held back from a prior managing member to satisfy unreimbursed costs incurred prior to the August 10, 2017 change in member ownership.~~equipment.

Financing activities ~~provided~~used cash of ~~$870,796,~~$442,456, during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2022, and cash provided by financing activities for the same period in ~~2016~~2021 was ~~$314,695.~~$26,978. During the ~~nine~~six months ended ~~September~~June 30, ~~2017, we received~~2022, cash ~~proceeds of $2,860,000 from the issuance of Series C redeemable convertible preferred stock (Series C Preferred Stock)~~paid for interest was $46,894 and ~~Class M Warrants in a private placement transaction whereas we reported no similar proceeds~~ during the same six-month period in ~~2016.~~2021, cash paid for interest was $61,320. Additionally, during the ~~nine~~six months ended ~~September~~June 30, 2017, we used cash in the amount of $2,095,171 to redeem 8% Convertible Notes outstanding, as further discussed below. We also reported cash contributed through consolidated reporting of $32,286, which is the result of reporting our investment in RadQual using the consolidated method versus using the equity method of accounting. Additionally, during the nine months ended September 30, 2017,2022, we received ~~$13,681~~$9,173 in proceeds from the sale of our common stock through our Employee Stock Purchase Plan and $61,800 for exercise of warrants, as compared to ~~$3,282~~$8,995 in proceeds from the sale of our common stock through our Employee Stock Purchase Plan for the same period in ~~2016.~~

29

~~On February 17, 2017, we entered into subscription agreements with certain investors, including two~~2021. During the six months ended June 30, 2022, principal payments on notes payable was $509,257, as compared to $329,464 for the same period in 2021. This increase in principal payments was largely due to payment in full of the ~~Company’s directors, for~~2021 Promissory Note as described below.
In February 2022, the ~~sale~~Company paid its third annual dividend on the Series C Preferred Stock. Dividends payable totaled $243,780. Some holders of ~~(i) an aggregate of 3,433 shares of~~the Series C Preferred Stock ~~and (ii) Class M warrants~~elected to ~~purchase an aggregate of 17,165,000~~settle their dividend payments with shares of the Company’s common stock ~~(Class M Warrants), for gross proceeds~~in lieu of ~~$3,433,000.~~cash. The Series C Preferred Stock accrues dividends at a rate of 6% per annum, payable annually on February 17th of each year, commencing on February 17, 2018. The Series C Preferred Stock are convertible at the option of the holder at any time into shares of the Company's common stock at an initial conversion price equal to $0.10 per share, subject to adjustment. At any time after February 17, 2019, if the volume-weighted average closing price of the Company’s common stock over a period of 90 consecutive trading days is greater than $0.25 per share, the Company may redeem all or any portion of the outstanding Series C Preferred Stock at the original purchase price per share plus any accrued and unpaid dividends, payable in shares of common stock. All outstanding shares of Series C Preferred Stock will be redeemed by the Company on February 17, 2022 at the original purchase price per share, payable in cash orissued 2,271,980 shares of common stock ~~at the option~~in lieu of ~~the holder. Holders~~a dividend payment of ~~Series C Preferred Stock do not have any voting rights, except as required by law and in connection~~$204,480. The remaining $39,300 of dividend payable was settled with certain events as set forth in the Statement of Designation of the Series C Preferred Stock. The Class M Warrants are immediately exercisable at an exercise price of $0.12 per share, subject to adjustment as set forth in the warrant, and have a term of five years.cash.

As a part of the above offering, two holders of the Company’s 8% Convertible Notes converted principal plus accrued interest in the amount of $205,000 into 205 shares of Series C Preferred Stock and 205,000 Class M Warrants. Additionally, two of the Company’s directors converted outstanding notes payable and accrued interest in the amount of $368,000 into 368 shares of Series C Preferred Stock and 1,840,000 Class M Warrants.

Additionally, on March 24, 2017, we entered into an Amendment to the 8% Convertible Notes (the Amendment), pursuant to which the 8% Convertible Notes in July 2012 were amended to give noteholders certain additional rights. Pursuant to the Amendment, the Notes were modified to provide each holder the right, at the holder’s option, to convert all or any portion of the principal amount of the Notes, plus accrued but unpaid interest, into shares of Series C Preferred Stock at a conversion price of $1,000 per share prior to May 12, 2017. Holders that elected to convert their Notes into Series C Preferred Stock received a Class N Warrant to purchase up to 3,750 shares of the Company’s common stock for each share of Series C Preferred Stock received upon conversion of the Notes, with each Warrant having a five-year term, a cashless exercise feature, and an exercise price of $0.10 per share of common stock. On May 12, 2017, the Company completed the retirement of $1,835,000 of the Notes in early cash redemptions, and $780,000 of the Notes were converted into an aggregate of 780 shares of Series C Preferred Stock and Class N Warrants to purchase an aggregate of 2,925,000 shares of the Company’s common stock. The Class N Warrants are immediately exercisable at an exercise price of $0.10 per share, subject to adjustment as set forth in the warrant, and have a term of five years.

Total ~~decrease~~increase in cash for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2017,~~2022, was ~~$9,923~~$2,551,292 compared to ~~$12,024 December 31, 2016.~~

~~At August 10, 2017, we had~~ a ~~long-term investment~~cash decrease of $1,436,843, which represented a 24.5% ownership in units of RadQual. The value of this asset was based upon the purchase price of those shares and the continued business performance of RadQual. The investment was accounted for in accordance with the equity method. We originally purchased these shares with the intent of eventually acquiring the remaining shares of RadQual and thus improving the revenues and profit margin$403,461 for the ~~nuclear medicine business segment. As discussed above, pursuant to the purchase of the remaining 75.5% of the member units of RadQual by certain of the Company’s affiliates, our 24.5% investment~~same period in ~~RadQual was determined to have a market value of $489,999 and as a result we recorded a loss of $946,844 and wrote the investment down to fair value.~~2021.

We expect that cash from operations, cash raised via equity financing, and our current cash balance will be sufficient to fund operations for the next twelve months. Our future liquidity and capital funding requirements will depend on numerous factors, including, contract manufacturing agreements, commercial relationships, technological developments, market factors, available credit, and voluntary warrant redemption by shareholders. There is no assurance that additional capital and financing will be available on acceptable terms to the Company or at all.

At ~~September~~June 30, ~~2017,~~2022, there were ~~45,090,000~~no outstanding warrants to purchase our common stock. Included in this number are 25,000,000 Class L Warrants issued September 30, 2014, with an exercise price of $0.06 per share and an expiration date of December 23, 2018; 17,165,000 Class M Warrants issued February 17, 2017, with an exercise price of $0.12 per share and an expiration date of February 17, 2022; and, 2,925,000 Class N Warrants issued May 12, 2017, with an exercise price of $0.10 per share and an expiration date of May 12, 2022.

24

30

Debt

In July 2012, the Company entered into a securities purchase agreement with certain institutional and private investors pursuant to which it sold convertible debentures for an aggregate of $3,069,900 (the Notes). The Notes carried an interest rate of 8% were unsecured and matured July 2017. These Notes were convertible at any time into shares of the Company's common stock at an initial conversion price of $0.225 per share, subject to adjustment under certain conditions. Each investor also received a common stock purchase warrant to purchase common stock equal to twenty-five percent (25%) of the shares issuable upon conversion of the 8% Notes. These warrants were immediately exercisable at a price of $0.30 per share and have a term of five years.

In March 2017, we amended the 8% Convertible Notes giving the noteholders certain additional rights (the Amendment). Pursuant to the Amendment, the Notes were modified to provide each holder the right, at the holder’s option and exercisable prior to May 12, 2017, to convert all or any portion of the principal amount of the Notes, plus accrued but unpaid interest, into shares of the Company’s Series C Preferred Stock at a conversion price of $1,000 per share. Holders that elected to convert their Notes into Series C Preferred Stock received a warrant to purchase up to 3,750 shares of the Company’s common stock for each share of Series C Preferred Stock received upon conversion of the Notes, with each warrant having a five-year term, a cashless exercise feature, and an exercise price of $0.10 per share of common stock. As a result of this modification, $780,000 of the Notes was converted to 780 shares of Series C Preferred Stock and 2,925,000 Class N Warrants. Residual interest paid to Note holders who converted was $1,515.

In addition, the 8% Convertible Notes were amended to give each holder the right, at the holder’s option, to have the Company redeem part or all of the outstanding Notes for cash in an amount equal to 100% of the principal amount of the 8% Convertible Notes redeemed and all accrued but unpaid interest as of the redemption date. As a result of this amendment, $1,835,000 of principal plus accrued interest in the amount of $8,188 was redeemed by holders of the Notes. On July 27, 2017, all remaining outstanding Notes plus accrued interest were paid in cash for a total amount of $261,623.

On December ~~23,~~ 2013, we entered into a promissory note agreement with our then Chairman of the Board and one of our major shareholders, ~~(the Lenders),~~ pursuant to which we borrowed $500,000 ~~from the Lenders.~~(the 2013 Promissory Note). The ~~loan~~2013 Promissory Note is secured and bears interest at 6% per annum and was originally due ~~September~~June 30, 2014. AtAccording to the terms of the 2013 Promissory Note, at any time, the ~~Lenders~~lenders may ~~elect to have~~settle any or all of the principal ~~plus~~and accrued interest under the promissory note repaid in the form of our common stock at a price per share determined based upon the average closing price of our common stock for the 20 days preceding the maturity or prepayment date. In connection with ~~the promissory note, each of the Lenders was issued 5,000,000 warrants to purchase~~ shares of our common ~~stock at $0.06 per share. The warrants are immediately exercisable. Pursuant~~stock. In June 2014, pursuant to ~~an amendment to the promissory note on June 30, 2014,~~a modification, the maturity date was extended to December 31, 2017. In February 2017, ~~and each lender was granted an additional 7,500,000 warrants, which are immediately exercisable. In December 2016,~~ the ~~note~~2013 Promissory Note was further modified to extend the maturity date to December 31, 2020, with all remaining terms unchanged. In December 2019, the 2013 Promissory Note was further modified to extend the maturity date to December 31, 2021, with all remaining terms unchanged. In January 2022, the 2013 Promissory Note was modified to extend the maturity date to December 31, 2023, with all remaining terms unchanged. At ~~September~~June 30, ~~2017, the balance of the promissory note was $500,000 and~~2022, accrued interest payable on the ~~note was $114,234. Interest expense recorded for the three-~~2013 Promissory Note totaled $256,734.
In April 2018, we borrowed $120,000 from our Chief Executive Officer and ~~nine-month periods ended September 30, 2017, was $7,500 and $22,500, respectively.~~

In March 2016, we entered into a note payable for the purchase of a vehicle. The principal amount financed was $47,513. The term of the note is six years and the note carries an interest rate of 6.66%. Monthly payments are $805 and the note matures April 2022. The note is secured by the vehicle.

~~In August 2017, we entered into a promissory note agreement with our~~ Chairman of the Board pursuant to a promissory note (the 2018 Promissory Note). The 2018 Promissory Note accrues interest at 6% per annum, which is payable upon maturity of the 2018 Promissory Note. The 2018 Promissory Note was originally unsecured and originally matured on August 1, 2018. At any time, the holder of the 2018 Promissory Note may elect to have any or all of the principal and accrued interest settled with shares of our common stock based on the average price of the shares over the previous 20 trading days. Pursuant to an amendment to the 2018 Promissory Note in June 2018, the maturity date was extended to March 31, 2019 with all other provisions remaining unchanged. Pursuant to a second amendment to the 2018 Promissory Note in February 2019, the maturity date was extended to July 31, 2019 with all other provisions remaining unchanged. Pursuant to a third amendment to the 2018 Promissory Note in July 2019, the maturity date was extended to January 31, 2020 with all other provisions remaining unchanged. Pursuant to a fourth amendment to the 2018 Promissory Note in December 2019, the maturity date was extended to December 31, 2021, the note was modified to become secured by company assets, with all other provisions remaining unchanged. In December 2021, the 2018 Promissory Note was modified to extend the maturity date to December 31, 2023, with all remaining terms unchanged. At June 30, 2022, accrued interest on the 2018 Promissory Note totaled $30,170.
In December 2019 and February 2020, we borrowed ~~$60,000.~~$1,000,000 from our Chief Executive Officer, Chairman of the Board, former Chairman of the Board, and one of our major shareholders pursuant to a promissory note (the 2019 Promissory Note). The 2019 Promissory Note bears an interest rate of 4% annually and is due December 31, 2022. According to the terms of the 2019 Promissory Note, at any time, the lenders may settle any or all of the principal and accrued interest with shares of the Company’s common stock based on the average closing price of the Company’s common stock for the 20 days preceding the payment. At June 30, 2022, the balance of the 2019 Promissory Note was $1,000,000, The remaining debt discount was $75,037, the remaining beneficial conversion feature was $53,096, and the accrued interest on the 2019 Promissory Note totaled $99,131.
In April 2021, we borrowed $250,000 from its Chief Executive Officer and Chairman of the Board pursuant to a promissory note ~~bears~~(the 2021 Promissory Note). The 2021 Promissory Note accrued interest at 5%6% per annum, which was payable upon maturity of the 2021 Promissory Note. The 2021 Promissory Note was originally secured and ~~matures June 30, 2018~~was to mature on December 31, 2022. At any time, the holders of the 2021 Promissory Note were able to elect to have any or all of the principal and accrued interest settled with shares of our common stock at a conversion price of $0.11 per share. On March 31, 2022, the Company repaid the 2021 Promissory Note in full. The payment included $250,000 in principal and $14,500 in interest.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
From time-to-time, management reviews and evaluates certain accounting policies and estimates that are considered to be significant in determining our results of operations and financial position.
A description of the Company’s critical accounting policies and estimates that affect the preparation of the Company’s financial statements is ~~unsecured.~~set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 31, 2022.

~~OFF-BALANCE SHEET ARRANGEMENTS~~
25

~~As of September 30, 2017, we had no off-balance sheet arrangements or obligations.~~

31

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), that are designed to ensure that material information relating to us is made known to the officers who certify our financial reports and to other members of senior management and the Board of Directors. These disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports that are filed or submitted under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by ~~an issuer~~us in the reports that ~~it files~~we file or ~~submits~~submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Management, with the participation of our ~~CEO~~Chief Executive Officer and ~~CFO,~~Chief Financial Officer, has evaluated the effectiveness, as of ~~September~~June 30, ~~2017,~~2022, of our disclosure controls and procedures. Based on that evaluation, our ~~CEO~~Chief Executive Officer and ~~CFO~~Chief Financial Officer concluded that our disclosure controls and procedures were effective as of ~~September~~June 30, ~~2017.~~2022.

Changes in Internal Control over Financial Reporting

In connection with the consolidation of RadQual as of August 10, 2017, we put in place certain controls and procedures with respect to the reporting of financial results of RadQual. Except for these changes, thereThere have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended ~~September~~June 30, ~~2017~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II–OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~Except as set forth below, we were not a party to any~~A discussion of legal ~~proceedings that we believe to be material~~matters is found in Note 8, “Commitments and ~~we are not aware of any pending or threatened litigation against us that we believe could have a material adverse effect on our business, operating results, financial condition or cash flows.~~

~~On March 8, 2016, we delivered a Demand for Arbitration letter to Alpha Omega Services (AOS) of Bellflower, California. The demand letter requested arbitration before~~Contingencies”, in the American Arbitration Association seeking the recovery of a cash deposit made to AOS for the purchase of a shipping container plus additional amounts for lost revenue as a result of not owning the container. The demand was for approximately $918,000 plus attorneys’ fees and costs. AOS subsequently respondedaccompanying notes to the ~~demand letter with a counter-demand. The counter-demand denied our claims against AOS and requested reimbursement from us~~unaudited condensed consolidated financial statements included in the amount of $2,000,000, plus attorneys’ fees and costs. We subsequently have requested additional damages in the amount of $863,806 bringing the total claim for refund and damages to $1,673,241. Both parties conducted two weeks of arbitration hearings at various times from March through August 2017. A final decision from the arbitrator should be made before the end of 2017. At this time, it is not possible to predict the outcomePart I - Item 1. Financial Statements of this ~~matter and there is no assurance that we will be successful in recovering damages from our claim or defending the counter claims.~~Quarterly Report.

ITEM 1A. RISK FACTORS

There have been no material changes or updates to the risk factors previously disclosed in Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

26
ITEM 6. EXHIBITS

Exhibit No. Description
~~Exhibit~~
3.1 Restated Certificate of Formation, as amended(incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q for quarter ended June 30, 2010).
~~No.~~
3.2 Statement of Designation of the Series C Convertible Redeemable Preferred Stock of International Isotopes Inc.(incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on February 24, 2017).
~~Description~~
3.3 Certificate of Amendment to Statement of Designation of the Series C Convertible Redeemable Preferred Stock International Isotopes Inc., dated February 16, 2022(incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on February 22, 2022).

3.4 Bylaws(incorporated by reference to Exhibit 3.2 of the Company's Registration Statement on Form SB-2 filed on May 1, 1997 (Registration No. 333-26269)).
~~3.1~~
31.1* Certification by the Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
~~Restated Certificate of Formation, as amended (incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q for quarter ended June 30, 2010)~~.
31.2* Certification by the Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.

32.1** Certification by the Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
~~3.2~~
32.2** Certification by the Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Statement of Designation of the Series C Convertible Redeemable Preferred Stock of International Isotopes Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on February 24, 2017).
101.INS* Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH* Inline XBRL Taxonomy Extension Schema Document
~~3.3~~
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document
~~Bylaws (incorporated by reference to Exhibit 3.2 of the Company's Registration Statement on Form SB-2 filed on May 1, 1997 (Registration No. 333-26269))~~.
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document
~~31.1~~
101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document
~~Certification by the Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.~~*
104 Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101).

~~31.2~~
~~Certification by the Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.~~*

~~32.1~~
~~Certification by the Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~**

~~32.2~~
~~Certification by the Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~**

~~101~~
The following financial statements, formatted in XBRL: (i) Unaudited Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016, (ii) Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016, (iii) Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016 and (iv) Notes to Unaudited Condensed Consolidated Financial Statements.*

~~________________~~_______________
* Filed herewith.
** Furnished herewith.

27
~~SIGNATURES~~

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:  August 15, 2022
~~Date: November 14, 2017~~
International Isotopes Inc.
By:
/s/ Steve T. Laflin
Steve T. Laflin
President and Chief Executive Officer
By:
/s/ ~~Laurie McKenzie-Carter~~
W. Matthew Cox
~~Laurie McKenzie-Carter~~
W. Matthew Cox
Chief Financial Officer

34

28


	September 30,		December 31,
Assets	2017		2016
Current assets
Cash and cash equivalents	$	304,597	$	314,520
Accounts receivable		1,083,137		774,275
Inventories		1,788,784		1,476,240
Prepaids and other current assets		609,414		736,447
Total current assets		3,785,932		3,301,482

Long-term assets
Restricted bank and money market accounts		952,536		450,631
Property, plant and equipment, net		1,904,103		1,948,076
Investment		-		1,492,781
Patents and other intangibles, net		5,923,738		4,186,295
Total long-term assets		8,780,377		8,077,783
Total assets	$	12,566,309	$	11,379,265

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	2,000,966	$	941,659
Accrued liabilities		714,014		568,714
Convertible debt, net of debt discount		-		3,025,165
Current portion of unearned revenue		2,952,658		2,608,328
Current installments of notes payable		67,313		366,953
Total current liabilities		5,734,951		7,510,819

Long-term liabilities
Obligation for lease disposal costs		476,044		468,974
Unearned revenues, net of current portion		364,440		364,440
Notes payable, net of current portion and debt discount		443,476		428,891
Mandatorily redeemable convertible preferred stock		4,496,334		850,000
Total long-term liabilities		5,780,294		2,112,305
Total liabilities		11,515,245		9,623,124

Stockholders' equity
Common stock, $0.01 par value; 750,000,000 shares authorized; 406,755,371 and 404,999,758 shares issued and outstanding respectively		4,067,554		4,049,998
Additional paid in capital		120,355,848		119,595,535
Accumulated deficit		(124,910,190)		(121,939,561)
(Deficit) Equity attributable to International Isotopes Inc. stockholders		(486,788)		1,705,972
Equity attributable to noncontrolling interest		1,537,852		50,169
Total equity		1,051,064		1,756,141
Total liabilities and stockholders' equity	$	12,566,309	$	11,379,265


	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016

Sale of product	$	1,900,701	$	1,411,263	$	5,520,733	$	4,801,672
Cost of product		1,054,186		908,291		3,169,208		2,776,863
Gross profit		846,515		502,972		2,351,525		2,024,809

Operating costs and expenses:
Salaries and contract labor		559,296		423,915		1,540,082		1,327,112
General, administrative and consulting		763,606		409,937		2,241,749		1,391,551
Research and development		65,911		118,693		267,563		401,710
Total operating expenses		1,388,813		952,545		4,049,394		3,120,373

Operating loss		(542,298)		(449,573)		(1,697,869)		(1,095,564)

Other income (expense):
Other income (expense)		(940,976)		258		(940,851)		6,605
Equity in net income of affiliate		8,040		27,005		53,173		71,578
Interest income		928		117		2,011		274
Interest expense		(113,765)		(119,384)		(391,524)		(348,426)
Total other income (expense)		(1,045,773)		(92,004)		(1,277,191)		(269,969)
Net loss		(1,588,071)		(541,577)		(2,975,060)		(1,365,533)
Loss attributable to non-controlling interest		(5,906)		(2,220)		(4,432)		(6,231)

Net loss attributable to International Isotopes Inc.	$	(1,582,165)	$	(539,357)	$	(2,970,628)	$	(1,359,302)

Net loss per common share - basic and diluted	$	-	$	-	$	-	$	-

Weighted average common shares outstanding – basic and diluted		406,751,293		403,859,723		406,375,721		402,892,423


	3 Months Ended				6 Months Ended
	June 30,		June 30,		June 30,		June 30,
	2022		2021		2022		2021
Weighted average common shares outstanding - basic		510,499,497		460,798,173		506,985,962		457,123,946

Effects of dilutive shares
Stock Options		0		0		5,583,152		0
Weighted average common shares outstanding - diluted		510,499,497		460,798,173		512,569,114		457,123,946

Series B Redeemable Convertible Preferred Stock
Series C Redeemable Convertible Preferred Stock	June 30,
	2022		2021
Stock options		26,134,500		18,252,500
Warrants		—		7,065,000
Shares of Series B redeemable convertible preferred stock		—		337,500
Shares of Series C redeemable convertible preferred stock		40,630,000		41,880,000
		66,764,500		67,535,000


	September 30, 2017		December 31, 2016
Raw materials	$	44,455	$	44,455
Work in process		1,741,513		1,425,056
Finished goods		2,816		6,729
	$	1,788,784	$	1,476,240

	June 30, 2022		December 31, 2021
Radiochemical Products	$	47,435	$	79,747
Cobalt Products		405,152		441,749
Nuclear Medicine Products		491,058		403,279
		943,645		924,775


Fixed Options	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at December 31, 2016	23,316,667	$	0.05
Granted	11,500,000	$	0.06
Exercised	(2,566,667)	$	0.04		$	108,500
Forfeited	-
Outstanding at September 30, 2017	32,250,000	$	0.06	6.5	$	1,069,500
Exercisable at September 30, 2017	22,750,000	$	0.05	5.2	$	894,500

Fixed Options	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at December 31, 2021	20,777,500	$	0.06
Granted	8,025,000		0.09
Exercised	(1,000,000)		0.04
Expired	0		—
Forfeited	(1,668,000)		0.08
Outstanding at June 30, 2022	26,134,500		0.06	6.3	$	241,645
Exercisable at June 30, 2022	16,992,000	$	0.06	4.7	$	230,640


~~Warrants~~
~~Outstanding at December 31, 2016~~		~~27,419,172~~
~~Issued~~		~~20,090,000~~
~~Exercised~~		-
~~Forfeited~~		~~(2,419,172)~~
~~Outstanding at September 30, 2017~~		~~45,090,000~~ 11

U.S.	Three Months Ended June 30, 2022							Three Months Ended June 30, 2021
Outside U.S.	U.S.		Outside U.S.		Total Revenues		% of Total Revenues	U.S.		Outside U.S.		Total Revenues		% of Total Revenues
Radiochemical Products	$	1,266,249	$	113,790	$	1,380,039	57%	$	1,091,114	$	137,095	$	1,228,209	45%
Cobalt Products		89,946		9,200		99,146	4%		562,744		14,250		576,994	21%
Nuclear Medicine Products		744,154		211,469		955,623	39%		768,349		186,344		954,693	34%
Fluorine Products		0		0		0	0%		0		0		0	0%
	$	2,100,349	$	334,459	$	2,434,808	100%	$	2,422,207	$	337,689	$	2,759,896	100%

	Six Months Ended June 30, 2022							Six Months Ended June 30, 2021
	U.S.		Outside U.S.		Total Revenues		% of Total Revenues	U.S.		Outside U.S.		Total Revenues		% of Total Revenues
Radiochemical Products	$	2,776,571	$	229,391	$	3,005,962	57%	$	1,637,924	$	251,462	$	1,889,386	40%
Cobalt Products		256,502		14,550		271,052	5%		676,023		19,344		695,367	15%
Nuclear Medicine Products		1,584,536		380,699		1,965,235	38%		1,712,205		433,437		2,145,642	45%
Fluorine Products		0		0		0	0%		22,013		0		22,013	0%
	$	4,617,609	$	624,640	$	5,242,249	100%	$	4,048,165	$	704,243	$	4,752,408	100%

	Operating			Financing
2022 (excluding the six-months ended June 30, 2022)	$	143,554		$	4,820
2023		287,108			5,881
2024		287,108			2,929
2025		287,108			0
2026		287,108			0
Thereafter		2,312,301			0
Total minimum operating lease obligations		3,604,287			13,630
Less-amounts representing interest		(1,177,934	)		(914	)
Present value of minimum operating lease obligations		2,426,353			12,716
Current maturities		(127,217	)		(8,411	)
Lease obligations, net of current maturities	$	2,299,136		$	4,305

	Three months ended June 30,						Six months ended June 30,
Segment Income (Loss)	2022			2021			2022			2021
Radiochemical Products	$	505,630		$	404,457		$	2,976,293		$	408,882
Cobalt Products		(42,332	)		208,581			(55,407	)		178,484
Nuclear Medicine Standards		(26,144	)		110,085			11,572			373,403
Fluorine Products		(42,343	)		(31,627	)		(74,173	)		(65,141	)
Total Segments		394,811			691,496			2,858,285			895,628
Corporate loss		(666,859	)		(872,883	)		(1,875,288	)		(1,678,167	)
Net Income	$	(272,048	)	$	(181,387	)	$	982,997		$	(782,539	)

	Three months ended June 30,				Six months ended June 30,
Expenditures for Segment Assets	2022		2021		2022		2021
Radiochemical Products	$	0	$	0	$	0	$	3,103
Cobalt Products		0		0		0		16,592
Nuclear Medicine Standards		—		32,911		51,100		167,911
Fluorine Products		4,100		0		4,100		4,060
Total Segments		4,100		32,911		55,200		191,666
Corporate purchases		0		0		0		0
Total Consolidated	$	4,100	$	32,911	$	55,200	$	191,666

	June 30,		December 31,
Segment Assets	2022		2021
Radiochemical Products	$	924,131	$	2,890,590
Cobalt Products		563,906		597,420
Nuclear Medicine Standards		1,358,491		2,259,759
Fluorine Products		5,205,266		5,258,823
Total Segments		8,051,794		11,006,592
Corporate assets		8,500,270		5,320,550
Total Consolidated	$	16,552,064	$	16,327,142


	For the three- months ended September 30,		For the three- months ended September 30,					For the three- months ended June 30,		For the three- months ended June 30,
Sale of Product	2017		2016		$ change		% change	2022		2021		$ change		% change
Radiochemical Products	$	605,507	$	433,394	$	172,113	40%	$	1,380,039	$	1,228,209	$	151,830	12%
Cobalt Products		116,750		67,653		49,097	73%		99,146		576,994		(477,848)	-83%
Nuclear Medicine Standards		808,148		804,382		3,766	0%		955,623		954,693		930	0%
Radiological Services		349,565		99,807		249,758	250%
Fluorine Products		-		-		-	0%		-		-		-	0%
Transportation		20,731		6,027		14,704	244%
Total Segments		1,900,701		1,411,263		489,438	35%
Total Consolidated	$	1,900,701	$	1,411,263	$	489,438	35%	$	2,434,808	$	2,759,896	$	(325,088)	-12%


	For the three- months ended September 30,			% of Total Sales	For the three- months ended September 30,			% of Total Sales	For the three- months ended June 30,		% of Total Sales	For the three- months ended June 30,		% of Total Sales
	2017			2017	2016			2016	2022		2022	2021		2021
Total Sales	$	1,900,701			$	1,411,263			$	2,434,808		$	2,759,896
Cost of Sales
Radiochemical Products	$	436,019		23%	$	318,388		23%	$	506,522	50%	$	487,126	18%
Cobalt Products		14,399		1%		35,939		3%		26,014	1%		263,948	10%
Nuclear Medicine Standards		444,346		23%		500,609		35%		501,742	21%		420,894	14%
Radiological Services		158,601		8%		50,347		4%
Fluorine Products		-		-		-		-		-	0%		-	0%
Transportation		821		0%		3,008		0%
Total Segments		1,054,186		55%		908,291		65%		1,034,278	72%		1,171,968	42%

Gross Profit	$	846,515			$	502,972			$	1,400,530		$	1,587,928
Gross Profit %		45	%			36	%			58%			58%


		For the nine- months ended September 30,		For the nine- months ended September 30,				For the six- months ended June 30,		For the six- months ended June 30,
Sale of Product		2017		2016		$ change	% change	2022		2021		$ change		% change
Radiochemical Products	$	1,777,903	$	1,216,587	$	561,316	46%	$	3,005,962	$	1,889,386	$	1,116,576	59%
Cobalt Products		420,816		573,308		(152,492)	(27%)		271,052		695,367		(424,315)	-61%
Nuclear Medicine Standards		2,451,252		2,454,399		(3,147)	0%		1,965,235		2,145,642		(180,407)	-8%
Radiological Services		844,898		460,874		384,024	83%
Fluorine Products		-		-		-	0%		-		22,013		(22,013)	-100%
Transportation		25,864		96,504		(70,640)	(73%)
Total Segments		5,520,733		4,801,672		719,061	15%
Total Consolidated	$	5,520,733	$	4,801,672	$	719,061	15%	$	5,242,249	$	4,752,408	$	489,841	10%

Date: August 15, 2022
~~Date: November 14, 2017~~	International Isotopes Inc.


	By:	/s/ Steve T. Laflin
		Steve T. Laflin
		President and Chief Executive Officer


	By:	/s/ ~~Laurie McKenzie-Carter~~ W. Matthew Cox
		~~Laurie McKenzie-Carter~~ W. Matthew Cox
		Chief Financial Officer